TY - JOUR
T1 - Market effects of environmental regulation
T2 - Coal, railroads, and the 1990 Clean Air Act
AU - Busse, Meghan R.
AU - Keohane, Nathaniel O.
PY - 2007
Y1 - 2007
N2 - 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.
AB - 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.
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U2 - 10.1111/j.0741-6261.2007.00130.x
DO - 10.1111/j.0741-6261.2007.00130.x
M3 - Article
AN - SCOPUS:41749098593
SN - 0741-6261
VL - 38
SP - 1159
EP - 1179
JO - RAND Journal of Economics
JF - RAND Journal of Economics
IS - 4
ER -