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The Benefits of Spatially Differentiated Regulation: The Response to Acid Rain by U.S. States Prior to the Acid Rain Program
Author(s) -
Perino Grischa,
Talavera Olena
Publication year - 2014
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1093/ajae/aat084
Subject(s) - acid rain , externality , clean air act , natural resource economics , marginal abatement cost , damages , sulfur dioxide , welfare , economics , environmental science , air pollution , greenhouse gas , chemistry , microeconomics , ecology , law , political science , biology , market economy , inorganic chemistry , organic chemistry
Location is a crucial driver of both the marginal abatement and damage costs of sulfur dioxide emissions by U.S. coal‐fired power plants. Before the start of the Acid Rain Program in 1995, old boilers were subject to emission rate standards set by individual states. We investigate how individual states adjusted their sulfur regulation laws in response to acid rain, and whether they accounted for differences in marginal abatement costs, vulnerability to agricultural damages, special industry interests, or inter‐state externalities. The welfare gain compared to a uniform reduction in emission rate standards is estimated to be $21 million (in 1995 dollars) annually.