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Are Emission Performance Standards Effective in Pollution Control? Evidence from the EU's Large Combustion Plant Directive

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  • Puja Singhal

Abstract

This paper explores the extent to which emissions limits on stack concentrations under the Large Combustion Plant (LCP) Directive succeeded in mitigating local air pollutants from thermal power stations in the European Union. We take advantage of the discontinuities in regulation status to show that the emission performance standards led to sizeable declines in concentrations of SO2 , NOx, and particulate matter from the oldest fleet of combustion plants. We also find that the average response from the existing old plants was stronger than that from the relatively new existing fleet. Taking into account that new plants were not myopic in complying to the standards, we estimate the treatment effect close to the regulation discontinuity date – showing that more stringent performance standards were effective. Finally, those that opted-out were not more likely to retire than similar combustion plants that chose to comply with standards - some evidence of grandfathering-induced shutdown delays.

Suggested Citation

  • Puja Singhal, 2018. "Are Emission Performance Standards Effective in Pollution Control? Evidence from the EU's Large Combustion Plant Directive," Discussion Papers of DIW Berlin 1773, DIW Berlin, German Institute for Economic Research.
  • Handle: RePEc:diw:diwwpp:dp1773
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    File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.608701.de/dp1773.pdf
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    References listed on IDEAS

    as
    1. Ann Harrison & Benjamin Hyman & Leslie Martin & Shanthi Nataraj, 2015. "When do Firms Go Green? Comparing Command and Control Regulations with Price Incentives in India," NBER Working Papers 21763, National Bureau of Economic Research, Inc.
    2. Bushnell, James B. & Wolfram, Catherine D., 2012. "Enforcement of vintage differentiated regulations: The case of new source review," Journal of Environmental Economics and Management, Elsevier, vol. 64(2), pages 137-152.
    3. Malani, Anup & Reif, Julian, 2015. "Interpreting pre-trends as anticipation: Impact on estimated treatment effects from tort reform," Journal of Public Economics, Elsevier, vol. 124(C), pages 1-17.
    4. Ann E. Harrison & Ben Hyman & Leslie A. Martin & Shanthi Nataraj, 2015. "When do Firms Go Green? Comparing Price Incentives with Command and Control Regulations in India," Working Papers WR-1133, RAND Corporation.
    5. Meyer, Andrew & Pac, Grzegorz, 2017. "Analyzing the characteristics of plants choosing to opt-out of the Large Combustion Plant Directive," Utilities Policy, Elsevier, vol. 45(C), pages 61-68.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Air pollution; emission standards; large combustion plant; EU;
    All these keywords.

    JEL classification:

    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law

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