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Impacts of Market-based Environmental and Generation Policy on Scrubber Electricity Usage

Allen Bellas and Ian Lange

Year: 2008
Volume: Volume 29
Number: Number 2
DOI: 10.5547/ISSN0195-6574-EJ-Vol29-No2-8
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The introduction of scrubbers as a means of controlling sulfur dioxide (SO2) emissions from stationary sources coincided with the implementation of the Clean Air Act of 1970. Since that time, there have been many policy changes affecting the electricity generation industry. These changes can be characterized as moving from direct regulation toward market-based incentives, both in deregulation or restructuring of power markets and adoption of market-based environmental regulation. These changes provide natural experiments for investigating whether the form of regulation can alter the rate of technological progress. This paper analyzes changes in scrubbers� use of electricity (also known as parasitic load) in relation to regulatory policy regimes. Results show that restructured electricity markets led to innovations that reduced parasitic load considerably (35-45%). Conversely, the change to a cap-and-trade system for SO2 has not led to similar reductions.

Voluntary Programs to Encourage Diffusion: The Case of the Combined Heat-and-Power Partnership

Andreas Ferrara and Ian Lange

Year: 2014
Volume: Volume 35
Number: Number 1
DOI: 10.5547/01956574.35.1.9
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In the last decade, voluntary environmental programs have increased considerably in number and scope. A novel use of these programs is to diffuse new technology in industry as means to improving their environmental outcomes. This paper tests whether the U.S. Environmental Protection Agency's Combined Heat-and-Power (CHP) Partnership has encouraged the diffusion of CHP systems. Using a nearest neighbor matching estimator with electricity plant data and conditional logit estimation for electricity and manufacturing plants in the U.S., we find evidence that the program has helped CHP systems spread, controlling for the selection of firms into the partnership. On average partner firms have a 3% higher probability of installing CHP.

Cleaner Nudges? Policy Labels and Investment Decision-making

Ian Lange, Mirko Moro, and Mohammad Mahbubur Rahman

Year: 2018
Volume: Volume 39
Number: Number 6
DOI: 10.5547/01956574.39.6.ilan
View Abstract

Recent evidence suggests that labeling of unconditional cash transfers leads recipients to spend more on the labeled good. In this paper we show that the Winter Fuel Payment, an unconditional cash transfer, has distortionary effects on the market for goods related to the labeled product, renewable technologies. Using a Regression Discontinuity Design this analysis finds a robust reduction in the probability to install renewable energy technologies of 1.2 percentage points. Falsification tests support the labeling hypothesis. As a result, households use too much energy from sources which generate pollution and too little from relatively cleaner technologies.

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