The Impact of Heterogeneous NOx Regulations on Distributed Electricity Generation in US Manufacturing
39 Pages Posted: 22 Mar 2015
Date Written: March 20, 2015
The US EPA’s command-and-control NOx policies of the early 1990s are associated with a 3.1 percentage point reduction in the likelihood of manufacturing plants vertically integrating the electricity generation process. During the same period California adopted a cap-and-trade program for NOx emissions that resulted in no significant impact on distributed electricity generation in manufacturing. These results suggest that traditional command-and-control approaches to air pollution may exacerbate other market failures such as the energy efficiency gap, because distributed generation is generally recognized as a more energy efficient means of producing electricity.
Keywords: RECLAIM, NOx RACT, NAAQS, Vertical Integration, Energy Efficiency
JEL Classification: Q48, Q55, L23
Suggested Citation: Suggested Citation