TY - JOUR
T1 - The price of pollution
T2 - A dual approach to valuing SO2 allowances
AU - Coggins, Jay S.
AU - Swinton, John R.
PY - 1996
Y1 - 1996
N2 - Under the 1990 Clean Air Act Amendments, a market-based scheme to reduce U.S. sulfur dioxide emissions takes effect in 1995. Indications are that participation in the market will be light and allowance prices will be lower than was once expected. Using an output distance function approach, for Wisconsin coal-burning utility plants we estimate the shadow price of SO2 abatement, which should approximate the allowance price. The estimated average shadow price is above the prices at which the few observed allowance trades have occurred. Wisconsin's stringent state SO2 legislation may explain a portion of this divergence.
AB - Under the 1990 Clean Air Act Amendments, a market-based scheme to reduce U.S. sulfur dioxide emissions takes effect in 1995. Indications are that participation in the market will be light and allowance prices will be lower than was once expected. Using an output distance function approach, for Wisconsin coal-burning utility plants we estimate the shadow price of SO2 abatement, which should approximate the allowance price. The estimated average shadow price is above the prices at which the few observed allowance trades have occurred. Wisconsin's stringent state SO2 legislation may explain a portion of this divergence.
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U2 - 10.1006/jeem.1996.0005
DO - 10.1006/jeem.1996.0005
M3 - Article
AN - SCOPUS:0030064270
SN - 0095-0696
VL - 30
SP - 58
EP - 72
JO - Journal of Environmental Economics and Management
JF - Journal of Environmental Economics and Management
IS - 1
M1 - 0005
ER -