Regulating Greenhouse Gases from Coal Power Plants Under the Clean Air Act
Resources for the Future Discussion Paper No. 13-05
66 Pages Posted: 1 Mar 2013 Last revised: 3 May 2014
Date Written: February 19, 2013
The Clean Air Act has assumed the central role in US climate policy, directing the development of regulations governing greenhouse gas emissions from existing coal-fired power plants. This paper examines the operation of coal-fired generating units over 25 years to estimate the marginal costs and potential magnitude of emissions reductions from improving their efficiency. We find that a 10 percent increase in coal prices causes a 0.2 to 0.5 percent heat rate reduction, broadly consistent with engineering assessments. We also find that coal prices have a significant effect on utilization. The results are used to compare cost-effectiveness of alternative policies.
Keywords: efficiency, regulation, greenhouse gas, carbon dioxide, coal, performance standards
JEL Classification: L94, Q54
Suggested Citation: Suggested Citation