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To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.jeem.2006.07.001 Byline: Timothy J. Considine (a), Donald F. Larson (b) Keywords: Emissions; Permits; Substitution Abstract: This paper uses firm-level data about electric utilities to develop an empirical model of how electric utilities use and bank SO.sub.2 pollution permits under the Acid Rain Program. The empirical model considers emissions, fuels, and labor as variable inputs with quasi-fixed stocks of permits and capital. Consequently, substitution possibilities between the environment and other production factors can be measured and tested. The results reveal substantial substitution between emissions, permit stocks, capital, fuel, and labor. The empirical findings also indicate that firms bank permits primarily as a hedge against uncertainty and for other firm-specific reasons. Overall, the results suggest that cap-and-trade approaches can reduce the cost of meeting environmental goals by providing a mechanism for addressing regulatory and market risks and by signaling an appropriate price for factor use, especially irreversible capital investments. Author Affiliation: (a) The Pennsylvania State University, 125 Hosler, University Park, PA 16802, USA (b) Development Research Group, World Bank, 1818H. Street, NW, Washington, DC 20433, USA Article History: Received 4 October 2004

CONTROVERSY SURROUNDING THE EXISTENCE and management of the United States Strategic Petroleum Reserve (SPR) is not new. Since its creation, there have been legitimate concerns about whether the costs of [...]

Study showed that warmer weather in the U.S. lowers energy use and consequently reduces carbon emissions. Fluctuations in carbon emissions are due to climate changes.

Title III of the Clean Air Act Amendments of 1990 requires the regulation of 189 toxics, including emissions from by-product coke ovens. Title III has no provision for flexible regulatory instruments. Environmental health scientists say that population exposure and not necessarily ambient air quality should motivate environmental air pollution policies. An exposure-based policy can attain the same level of public health as coke oven emissions standards and can reduce compliance costs by up to 60%.

This paper presents a monthly econometric model of petroleum refining supply in the United States. The model is derived using a multiproduct restricted cost function with adjustment cost. the Euler [...]

Robert Bacon, M. Chadwich, J. Dargay, D. Long and R. Mabro, Demand Prices and the Refining Industry. A Case-Study of the European Oil Products Market (Oxford: Oxford University Press, 1990), [...]

While many studies examine the individual costs and benefits from fracking, there are no studies that provide a unified comparison of costs and benefits. This study attempts to fill this void by conducting a cost-benefit analysis of developing natural gas from the Marcellus shale formation in Pennsylvania. Using more than seven thousand well records, this study estimates production decline curves for vintages of Marcellus wells and their productivity growth over time. The value added created from constructing and operating a recent average Marcellus well is estimated. Environmental impacts are estimated based upon several thousand records of environmental violations impacting air, land, and water resources. Air emissions are estimated during the life cycle of the well from drilling, hydraulic fracturing, production, transportation, and consumption. Using estimates of environmental damage costs, the economic value of these environmental impacts is estimated. The economic benefits, including the environmental benefits from displacing coal, range from $14 to over $30 million with an expected value of $23 million per well. These estimates are likely a lower bound because they do not include the benefits that arise from lower natural gas due to shale energy development. Environmental impact costs range from $162 to $755 thousand per well with the largest impacts arising from diesel use by water pumps and trucks, forest disruption from pipeline construction, and methane lost during flow back and downstream methane leakage. These environmental costs were estimated using relatively high estimates for environmental impacts and damage costs. Unknown impacts may remain, however, from unreported environmental violations and from possible long-term health impacts. Nevertheless, this study finds that the economic benefits from fracking substantially exceed the costs of known environmental impacts. [ABSTRACT FROM AUTHOR]