The Impact of Heterogeneous NOx Regulations on Distributed Electricity Generation in US Manufacturing

39 Pages Posted: 22 Mar 2015

See all articles by Jonathan Lee

Jonathan Lee

East Carolina University - Department of Economics

Date Written: March 20, 2015

Abstract

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

Lee, Jonathan, The Impact of Heterogeneous NOx Regulations on Distributed Electricity Generation in US Manufacturing (March 20, 2015). Available at SSRN: https://ssrn.com/abstract=2581668 or http://dx.doi.org/10.2139/ssrn.2581668

Jonathan Lee (Contact Author)

East Carolina University - Department of Economics ( email )

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