Investigating the effects of the 1990 Clean Air Act Amendments on inputs to coal-fired power plants

Abstract

This dissertation examines the effects of the 1990 Clean Air Act Amendments (CAAA) on inputs to coal-fired power plants. The 1990 CAAA established a system of tradable permits for sulfur dioxide (SO2) emissions for all power plants and granted utilities complete freedom in how they achieved compliance. While much of the literature has focused on the market for SO2 emissions permits, the 1990 CAAA fundamentally altered the way power plants choose their inputs, especially those related to SO 2 emissions and control. Previously, many inputs were mandated or their true social value was distorted by command-and-control type regulation. The impact of a power plant's ability to efficiently choose its inputs will alter the way the input markets operate. The three empirical papers of this dissertation investigate the extent to which power plants are using their ability to choose inputs efficiently and the resulting impacts on input markets.