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Cost-Effective Control Strategies for Energy-Related Transboundary Air Pollution in Western Europe

In this paper a simulation model of the West European power plant industry, combined with transboundary source-receptor relationships, is used to determine cost-effective reduction rates for SO2 emissions in any one country so that certain, exogenously given, deposition reduction targets are attained. The overall costs implied by the proposed strategies, and their distribution among countries, are examined and compared to those associated with the traditional emission-standard approach. It is found that the cooperative and flexible strategies considered allow for overall cost savings of up to 60 percent, given the same degree of deposition reduction.

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Energy Specializations: Energy and the Environment – Air Emissions (other than greenhouse gases); Energy and the Environment – Policy and Regulation

JEL Codes: Q52: Pollution Control Adoption and Costs; Distributional Effects; Employment Effects, Q54: Climate; Natural Disasters and Their Management; Global Warming, Q41: Energy: Demand and Supply; Prices, Q42: Alternative Energy Sources

Keywords: Transboundary air pollution, SO2 emissions, Western Europe, Abatement costs, Tradeable permits

DOI: 10.5547/ISSN0195-6574-EJ-Vol11-No2-5

Published in Volume 11, Number 2 of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.


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