MULTIPOLLUTANT EFFICIENCY STANDARDS FOR ELECTRICITY PRODUCTION

This study contains a simulation of a coal-fired electric plant subject to multiple pollutant standards for SO₂ and NO_"x". It shows that firms may not choose the lowest cost technology. The firm's cost-minimizing choice is compared for three increasingly stringent standards: the 1990 Clean Air Act Amendments, the 1997 New Source Performance Standards, and the 2002 North Carolina Clean Smokestacks Act. The study finds support on cost-benefit grounds for the 2002 North Carolina standard, which is the most stringent standard, but not for the 1997 NSPS. (JEL "Q28", "Q25", "L94") Copyright 2005 Western Economic Association International.