IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

CAAA Induced Competition in Coal Markets: A Model of Coal and Allowances

Listed author(s):
  • Doucet, Joseph


  • Sartzetakis, Eftichios
  • Strauss, Todd

The Clean Air Act Amendments (CAAA) of 1990 will have a major impact on U.S. coal markets. We argue that coal suppliers will be able to use the market in sulfur dioxide emissions allowances created by the CAAA to increase the range of their competitive strategies in their core business, coal. Entering the allowance market as a broker enables the coal supplier to bundle emissions allowances with coal. We develop a spatial model of CAAA compliance costs which highlights the impact of allowances on coal markets. This model is used to suggest how a coal supplier may use bundling strategically to improve its market share in coal. Key features of the model include spatial differentiation of electric utilities and coal suppliers, bargaining between electric utilities and coal suppliers, capital costs for CAAA compliance, and transaction costs in the allowance markets. We explore some of the implications and limitations of entry into the allowance market by coal suppliers and discuss questions for future research.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Paper provided by Université Laval - Département d'économique in its series Cahiers de recherche with number 9608.

in new window

Date of creation: 1996
Handle: RePEc:lvl:laeccr:9608
Contact details of provider: Postal:
Pavillon J.A. De Sève, Québec, Québec, G1K 7P4

Phone: (418) 656-5122
Fax: (418) 656-2707
Web page:

More information through EDIRC

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:lvl:laeccr:9608. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Manuel Paradis)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.