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Carbon Dioxide Emission Standards for U.S. Power Plants: An Efficiency Analysis Perspective

Hampf, Benjamin and Løvold Rødseth, Kenneth (2014):
Carbon Dioxide Emission Standards for U.S. Power Plants: An Efficiency Analysis Perspective.
In: Darmstadt Discussion Papers in Economics, (219), ISSN 1438-2733, [Online-Edition: https://www.download.tu-darmstadt.de/wi/vwl/ddpie/ddpie_219....],
[Article]

Abstract

On June 25, 2013, President Obama announced his plan to introduce carbon dioxide emission standards for electricity generation. This paper proposes an efficiency analysis approach that addresses which mission rates (and standards) would be feasible if the existing generating units adopt best practices. A new efficiency measure is introduced and further decomposed to identify different sources’ contributions to emission rate improvements. Estimating two Data Envelopment Analysis (DEA) models - the well-known joint production model and the new materials balance model - on a dataset consisting of 160 bituminous-fired generating units, we find that the average generating unit’s electricity-to-carbon dioxide ratio is 15.3 percent below the corresponding best-practice ratio. Further examinations reveal that this discrepancy can largely be attributed to non-discretionary factors and not to managerial inefficiency. Moreover, even if the best practice ratios could be implemented, the generating units would not be able to comply with the EPA’s recently proposed carbon dioxide standard.

Item Type: Article
Erschienen: 2014
Creators: Hampf, Benjamin and Løvold Rødseth, Kenneth
Title: Carbon Dioxide Emission Standards for U.S. Power Plants: An Efficiency Analysis Perspective
Language: English
Abstract:

On June 25, 2013, President Obama announced his plan to introduce carbon dioxide emission standards for electricity generation. This paper proposes an efficiency analysis approach that addresses which mission rates (and standards) would be feasible if the existing generating units adopt best practices. A new efficiency measure is introduced and further decomposed to identify different sources’ contributions to emission rate improvements. Estimating two Data Envelopment Analysis (DEA) models - the well-known joint production model and the new materials balance model - on a dataset consisting of 160 bituminous-fired generating units, we find that the average generating unit’s electricity-to-carbon dioxide ratio is 15.3 percent below the corresponding best-practice ratio. Further examinations reveal that this discrepancy can largely be attributed to non-discretionary factors and not to managerial inefficiency. Moreover, even if the best practice ratios could be implemented, the generating units would not be able to comply with the EPA’s recently proposed carbon dioxide standard.

Journal or Publication Title: Darmstadt Discussion Papers in Economics
Number: 219
Uncontrolled Keywords: Emission standards; Carbon dioxide emissions; Materials balance condition; Electricity generation; Weak G-disposability; Data Envelopment Analysis
Divisions: 01 Department of Law and Economics
01 Department of Law and Economics > Volkswirtschaftliche Fachgebiete
01 Department of Law and Economics > Volkswirtschaftliche Fachgebiete > Emprical Economics
Date Deposited: 07 Feb 2014 09:42
Official URL: https://www.download.tu-darmstadt.de/wi/vwl/ddpie/ddpie_219....
Additional Information:

JEL classification: Q53, Q48, D24

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