Between 2001 and 2019, coal-fired electricity generation fell by more than half due to generator retirements and reduced usage of remaining generators. Concurrently, technological advancements made previously unrecoverable shale gas reserves economically viable, thus causing downward pressure on natural gas prices. This made them competitive to coal-fired generators that were aging and becoming less efficient. Moreover, states and the federal government began regulating mercury emissions from the electric power sector, since such pollution harms human health. Little is known about how environmental regulation affects firm exit decisions, or in this case, coal generator retirements. Employing a staggered adoption difference-in- differences identification strategy in a two-way fixed effects model as well as a stacked model, I find that state-level mercury regulation that occurred before compliance of the federal-level Mercury and Air Toxics Standards had an insignificant impact on coal-fired generator retirement. Instead, generator-level abatement
investments, power plant efficiency, and state-level natural gas capacity growth help to account for the impressive departure of coal-fired generators from the grid.
Tag: Energy
Polar Vortexes in New England: Missing Money, Missing Markets, or Missing Regulation?
The 2014 and 2017-18 “polar vortex” events in New England served as virtual controlled experiments on how competitive natural gas and electricity markets coexist uneasily almost two decades after different kinds of regulatory restructuring initiatives freed different kinds of competitive forces to support the supply infrastructure in each energy market. As a region with no…
Fossil Fuel Subsidies, the Green Paradox and the Fiscal Paradox
Fossil fuel subsidies amounted to about 0.4% of global GDP in 2015, and there is an active call worldwide for eliminating them. The main argument in favor of removing subsidies is that it will lead to a reduction in global carbon emissions and a decrease in fiscal deficits. This paper shows that there are also…
Use and Abuse of Energy and Climate Scenarios—A Week of Controversy on Scenarios
Energy and climate scenarios, and all other scenarios, are controversial, because they touch strategic issues, and also affect very basic operational discussion, such as the choice of the fuel mix, or the degree of trading between companies and nations. This article documents a controversial exchange of ideas via email between the two opponents, about energy…
Long-term Energy and Climate Scenarios – An Introduction
This EEEP-symposium on “Long-term energy and climate scenarios” provides comprehensive coverage of the theory and practice of scenarios on energy and climate futures. The objective of this symposium is to contribute to the debate with a discussion of both, political economy aspects of scenario making, either positive and/or normative, but also on concrete scenarios on…
Will China Lead the World into a Clean-energy Future?
China became the world’s biggest energy consumer in 2009 and the biggest emitter of carbon dioxide (CO2) two years earlier, having surpassed the United States on both counts. Driven by a strong economy, China will almost certainly see both of these facts reinforced in the years to come, despite its energy consumption and CO2 emissions…