TY - GEN
T1 - Emissions abating technology adoption under the SO2 permit market
T2 - 2013 ASE/IEEE Int. Conf. on Social Computing, SocialCom 2013, the 2013 ASE/IEEE Int. Conf. on Big Data, BigData 2013, the 2013 Int. Conf. on Economic Computing, EconCom 2013, the 2013 PASSAT 2013, and the 2013 ASE/IEEE Int. Conf. on BioMedCom 2013
AU - Creamer, Bernardo
AU - Creamer, Germán G.
PY - 2013
Y1 - 2013
N2 - SO2, sulfur dioxide, emissions generated by electric power plants account for a large proportion of the total emissions in the U.S.A. In 2008, electricity generation caused nearly 7.9 million tons of SO2 emissions out of a total of 9.5 million tons. The negative side effects of SO2 emissions have been thoroughly evaluated, especially health deterioration issues caused by acid rain and other unwanted impacts that generate significant social costs. In response to these effects, the U.S. Congress passed the Clear Air Act (CAA) in the 1970s to cut down SO2 among other emissions. The CAA Amendments (CAAA) of 1990 created a competitive cap-and-trade market for SO2 allowances that lowered overall emission levels. This paper builds a social network among the different states of U.S.A. based on the trade of coal during the period 1990 to 2005 to evaluate the factors that affect the decision of coal burning electric power firms to adopt emission abating technology. In particular, these companies follow one or a combination of these strategies to comply with the CAAA emission restrictions: 1) paying the new costs of emissions and continuing business as usual, 2) using higher quality inputs (lower sulfur coal) that generate less pollution, or 3) upgrading their processes and equipment to lower emissions. The main factors explored are prices and quantities of low and high sulfur coal; SO2 allowances prices; and the operation and maintenance cost of abating technology (flue-gas desulfurization (FGDs) or scrubbers). This paper concludes that firms respond to the imposition of pollution control regulations by selecting a strategy that simultaneously control emissions and minimize costs. The firms reduce their pollutions using higher quality inputs (sub-bituminous coal), investing in new emission abating technology or a combination of both approaches. The longitudinal social network analysis shows that the dynamic of the fuel network where there is an increasing adoption of technology by most of the states may explain, jointly with the reduction of gas prices, the collapse of the allowance market for SO2 after 2005.
AB - SO2, sulfur dioxide, emissions generated by electric power plants account for a large proportion of the total emissions in the U.S.A. In 2008, electricity generation caused nearly 7.9 million tons of SO2 emissions out of a total of 9.5 million tons. The negative side effects of SO2 emissions have been thoroughly evaluated, especially health deterioration issues caused by acid rain and other unwanted impacts that generate significant social costs. In response to these effects, the U.S. Congress passed the Clear Air Act (CAA) in the 1970s to cut down SO2 among other emissions. The CAA Amendments (CAAA) of 1990 created a competitive cap-and-trade market for SO2 allowances that lowered overall emission levels. This paper builds a social network among the different states of U.S.A. based on the trade of coal during the period 1990 to 2005 to evaluate the factors that affect the decision of coal burning electric power firms to adopt emission abating technology. In particular, these companies follow one or a combination of these strategies to comply with the CAAA emission restrictions: 1) paying the new costs of emissions and continuing business as usual, 2) using higher quality inputs (lower sulfur coal) that generate less pollution, or 3) upgrading their processes and equipment to lower emissions. The main factors explored are prices and quantities of low and high sulfur coal; SO2 allowances prices; and the operation and maintenance cost of abating technology (flue-gas desulfurization (FGDs) or scrubbers). This paper concludes that firms respond to the imposition of pollution control regulations by selecting a strategy that simultaneously control emissions and minimize costs. The firms reduce their pollutions using higher quality inputs (sub-bituminous coal), investing in new emission abating technology or a combination of both approaches. The longitudinal social network analysis shows that the dynamic of the fuel network where there is an increasing adoption of technology by most of the states may explain, jointly with the reduction of gas prices, the collapse of the allowance market for SO2 after 2005.
KW - Computational economics
KW - Energy economics
KW - Environmental economics
KW - Social networks
KW - Technological change
UR - http://www.scopus.com/inward/record.url?scp=84893580103&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=84893580103&partnerID=8YFLogxK
U2 - 10.1109/SocialCom.2013.111
DO - 10.1109/SocialCom.2013.111
M3 - Conference contribution
AN - SCOPUS:84893580103
SN - 9780769551371
T3 - Proceedings - SocialCom/PASSAT/BigData/EconCom/BioMedCom 2013
SP - 744
EP - 749
BT - Proceedings - SocialCom/PASSAT/BigData/EconCom/BioMedCom 2013
Y2 - 8 September 2013 through 14 September 2013
ER -