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Market effects of environmental regulation: coal, railroads, and the 1990 Clean Air Act
Article first published online: 9 OCT 2008
DOI: 10.1111/j.0741-6261.2007.00130.x
2007, RAND
1756-2171/asset/cover.gif?v=1&s=7001f43b9aed97462853e6993797eedb322c3c3e "The RAND Journal of Economics")
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How to Cite
Busse, M. R. and Keohane, N. O. (2007), Market effects of environmental regulation: coal, railroads, and the 1990 Clean Air Act. The RAND Journal of Economics, 38: 1159–1179. doi: 10.1111/j.0741-6261.2007.00130.x
Publication History
- Issue published online: 9 OCT 2008
- Article first published online: 9 OCT 2008
- Abstract
- Article
- References
- Cited By
Many environmental regulations encourage the use of “clean” inputs. When the suppliers of such an input have market power, environmental regulation will affect not only the quantity of the input used but also its price. We investigate the effect of the Title IV emissions trading program for sulfur dioxide on the market for low-sulfur coal. We find that the two railroads transporting coal were able to price discriminate on the basis of environmental regulation and geographic location. Delivered prices rose for plants in the trading program relative to other plants, and by more at plants near a low-sulfur coal source.