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Acid Rain

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  • Newbery, David M G

Abstract

Acid rain is caused by sulphur dioxide (SO2), largely from power stations, and nitrogen oxides (NOx), half of which comes from vehicles. The paper attempts to quantify the costs and benefits of abatement in Europe, and concludes that the current agreement on uniform reductions from 1980 levels is inefficient and costly. The evidence suggests that SO2 pollution from power stations is costly and should be reduced. The damage done by different polluters varies significantly with location, as does the cost of abatement. A better solution is payment for reductions from benchmark levels, but tradable permits give rise to problems within the privatized but duopolized electricity-generating industry in the United Kingdom. The emphasis on reducing NOx emissions from vehicles seems misplaced and costly. For both pollutants the present state of knowledge about the costs of the damage done is poor and is a major impediment to rational policy making.

Suggested Citation

  • Newbery, David M G, 1990. "Acid Rain," CEPR Discussion Papers 442, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:442
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    Citations

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    Cited by:

    1. de Zeeuw, A.J., 1998. "The acid rain differential game," Other publications TiSEM f6c561bf-c603-4de7-994c-e, Tilburg University, School of Economics and Management.
    2. Labandeira-Villot, Xavier, 1996. "Market instruments and the control of acid rain damage : Effects of a sulphur tax on the Spanish electricity generating industry," Energy Policy, Elsevier, vol. 24(9), pages 841-854, September.
    3. Andrea Mantovani & Ornella Tarola & Cecilia Vergari, 2014. "Hedonic quality, social norms, and environmental campaigns," Working Papers 2014/36, Institut d'Economia de Barcelona (IEB).
    4. Nagase, Yoko & Silva, Emilson C.D., 2007. "Acid rain in China and Japan: A game-theoretic analysis," Regional Science and Urban Economics, Elsevier, vol. 37(1), pages 100-120, January.
    5. Hutton, J P & Halkos, G E, 1995. "Optimal acid rain abatement policy for Europe: An analysis for the year 2000," Energy Economics, Elsevier, vol. 17(4), pages 259-275, October.
    6. Dragone, Davide & Lambertini, Luca & Palestini, Arsen, 2014. "Regulating Environmental Externalities through Public Firms: A Differential Game," Strategic Behavior and the Environment, now publishers, vol. 4(1), pages 15-40, April.
    7. Ngo Van Long & Antoine Soubeyran, 2000. "Permis de pollution et oligopole asymétrique," Économie et Prévision, Programme National Persée, vol. 143(2), pages 83-89.
    8. Nagase, Yoko & Silva, Emilson C. D., 2000. "Optimal Control of Acid Rain in a Federation with Decentralized Leadership and Information," Journal of Environmental Economics and Management, Elsevier, vol. 40(2), pages 164-180, September.
    9. Halkos, George, 2013. "Uncertainty in optimal pollution levels: Modeling the benefit area," MPRA Paper 47768, University Library of Munich, Germany.
    10. Benchekroun, Hassan & van Long, Ngo, 1998. "Efficiency inducing taxation for polluting oligopolists," Journal of Public Economics, Elsevier, vol. 70(2), pages 325-342, November.
    11. Houda Haffoudhi, 2005. "Political-support lobbies responses to international environmental agreements," Post-Print halshs-00195593, HAL.
    12. Basak Bayramoglu & Jean-François Jacques, 2015. "International Environmental Agreements: The Case of Costly Monetary Transfers," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 62(4), pages 745-767, December.
    13. Caplan, Arthur J. & Silva, Emilson C. D., 1999. "Federal Acid Rain Games," Journal of Urban Economics, Elsevier, vol. 46(1), pages 25-52, July.
    14. Barrett, Alan & Lawlor, John, 1995. "The Economics of Solid Waste Management in Ireland," Research Series, Economic and Social Research Institute (ESRI), number PRS26.
    15. Halkos, George, 2000. "Determining optimal air quality standards: Quantities or prices?," MPRA Paper 42849, University Library of Munich, Germany.
    16. Hawdon, David & Pearson, Peter, 1995. "Input-output simulations of energy, environment, economy interactions in the UK," Energy Economics, Elsevier, vol. 17(1), pages 73-86, January.
    17. Finus, Michael & Rundshagen, Bianca, 1998. "Toward a Positive Theory of Coalition Formation and Endogenous Instrumental Choice in Global Pollution Control," Public Choice, Springer, vol. 96(1-2), pages 145-186, July.

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