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The price of pollution: A dual approach to valuing SO{sub 2} allowances

Journal Article · · Journal of Environmental Economics and Management
;  [1]
  1. Univ. of Wisconsin, Madison, WI (United States)
Beginning in 1995, Title IV of the 1990 Clean Air Act Amendments dramatically reduces emissions of sulfur dioxide from US coal burning electric utilities. To achieve this reduction at the lowest possible cost, the law also creates a national market for sulfur dioxide allowances. This paper introduces into the sulfur dioxide compliance literature a method developed by Fare and Gorsskopf for use in deducing the price of a pollutant from plant-level data on the underlying technical relationship between inputs and multiple outputs. An estimate of the average shadow price of sulfur dioxide abatement for Wisconsin coal-burning electric plants is also provided, and this price could be interpreted as the value of an allowance to the plants in the study.
OSTI ID:
379401
Journal Information:
Journal of Environmental Economics and Management, Journal Name: Journal of Environmental Economics and Management Journal Issue: 1 Vol. 30; ISSN JEEMDI; ISSN 0095-0696
Country of Publication:
United States
Language:
English

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