Considine, Timothy J.Larson, Donald F.2013-06-212013-06-212004-04https://hdl.handle.net/10986/14112The authors develop a model of environmental resource use in production with an empirical analysis of how electric power companies consume and bank sulfur dioxide pollution permits. The model considers emissions, fuels, and labor as variable inputs with quasi-fixed inputs of permits and capital. Incorporating information from permit markets allows the authors to distinguish between user costs and asset shadow values. Their findings indicate that firms are holding stocks of pollution permits for reasons other than short-term cost savings. The results also reveal substantial substitution possibilities between emissions, permits stocks, and other factors of production. The authors speculate that anticipated secondary markets for carbon-offset inventories related to the flexibility mechanisms of the Kyoto Protocol will have similar effects for greenhouse-gas emitting firms.en-USCC BY 3.0 IGOABATEMENTABATEMENT COSTABATEMENT COST FUNCTIONSABATEMENT COSTSACID RAINAIR QUALITYAIR QUALITY STANDARDSALLOCATION OF PERMITSALLOWANCE TRADINGARBITRAGEBASELINE LEVELSCAPITAL GAINCARBONCARBON DIOXIDECLEAN AIRCLEAN AIR ACTCLEAN AIR ACT AMENDMENTSCOALCOAL MININGCOAL USECOMMON PROPERTYCOMMON PROPERTY RESOURCESCOMPLIANCE COSTSCONSTANT RETURNS TO SCALECONVERGENCECOST SAVINGSDEREGULATIONDESULFURIZATIONDISCOUNT RATEDISEQUILIBRIUMDIVERGENCEECONOMETRIC ANALYSISECONOMIC ACTIVITYECONOMIC INCENTIVESECONOMIES OF SCALEELASTICITIESELECTRIC POWERELECTRIC POWER PLANTSELECTRICITYEMISSIONEMISSION CONTROLEMISSION CONTROLSEMISSION STANDARDSEMISSIONSEMISSIONS CONSTRAINTSEMISSIONS REDUCTIONSEMISSIONS STANDARDSEMPIRICAL ANALYSISEMPIRICAL STUDIESENVIRONMENTAL DAMAGESENVIRONMENTAL ECONOMICSENVIRONMENTAL POLICYENVIRONMENTAL POLLUTANTSENVIRONMENTAL PROTECTIONENVIRONMENTAL PROTECTION AGENCYENVIRONMENTAL RESOURCESEQUILIBRIUMFIXED INPUTSFUELFUEL SWITCHINGFUEL USEFUELSGASGENERATION CAPACITYGENERATION UNITSGREENHOUSEGREENHOUSE GASESHIGH SULFUR COALINDUSTRIAL BOILERSINFLATIONINPUT PRICESINPUT USEINTEREST RATEINVENTORIESLOW SULFUR COALLOW SULFUR COAL PRICESMARGINAL ABATEMENTMARGINAL ABATEMENT COSTMARGINAL ABATEMENT COSTSMARGINAL COSTMARGINAL COSTSMARGINAL EMISSIONSMARKET PRICESMERCURYNATURAL RESOURCE ECONOMICSNITROGENNITROGEN OXIDEOPPORTUNITY COSTOZONEPERMIT PRICEPERMIT SALESPERMIT TRADINGPERMITSPETPOLICY INSTRUMENTSPOLLUTIONPOLLUTION ABATEMENTPOLLUTION CONTROLPOLLUTION PERMITSPOWER GENERATIONPOWER PLANTSPRODUCTION COSTSPRODUCTION FUNCTIONPRODUCTION FUNCTIONSPROFIT MAXIMIZATIONQUALITY STANDARDSRAW MATERIALSREDUCING EMISSIONSRESOURCE USERETROFITTINGRISK PREMIUMSECONDARY MARKETSSO2SOLID WASTESSPOT MARKETSUBSTITUTION ELASTICITIESSULFURSULFUR DIOXIDETECHNOLOGICAL CHANGETIME SERIESTOTAL COSTSTRADABLE PERMITSTRANSACTIONS COSTSUNDERESTIMATESUTILITIESVALUATIONVARIABLE INPUTS ENVIRONMENTAL ASPECTS OF POLLUTIONELECTRIC POWERSULFUR DIOXIDEPOLLUTANTSEMISSIONSFUELSLABORFACTORS OF PRODUCTIONPERMITSGREENHOUSE GAS EMISSIONSWorld Bank10.1596/1813-9450-3271