Browsing by Subject "Environmental regulation"
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Item Essays in environmental regulation and firm dynamics(2011-05) Dardati, Evangelina Alejandra; Corbae, DeanIn this dissertation, I study the effect of environmental regulation on firm behavior. In the first chapter, I use a dynamic model to quantify the effects on exit, entry, investment and welfare of different allocation schemes of a cap-and-trade program. I focus on allocation rules regarding closing plants and new entrants. I calibrate the model with data from the US power plants and perform two policy experiments: first I quantify the effects of the introduction of a cap-and-trade program; second, I do a counterfactual where I switch the allocation rule and study the effect on the new equilibrium and welfare. In the second chapter of this dissertation, I ask whether multinational firms are harmful for a host country environment. I use plant-level data from Chile and find empirical evidence that multinational are cleaner than domestic plants. Based on the trade literature, I build a model where I add environmental regulation and a technology choice. The model proposes a new explanation of why multinationals firms might be cleaner than their domestic peers. I get policy implications from the model and test them with the data. In the third chapter, I study the relation between free permit allocation in a cap-and-trade program and financial constraints. I use the change in the permit prices and the heterogeneity in permit allocation to identify financial constraints for the investor-owned utilities in the electricity sector.Item Impacts of environmental regulation and wind penetration level on the ERCOT market(2012-12) Jin, Joo Hyun; Baldick, Ross; Kwasinski, AlexisAs more renewable resources are added into the grid and environmental regulations are imposed to reduce emissions, there will be dramatic changes in the generation portfolio. Assessing the impact of these changes is important for policy makers, market participants, and general public to understand trends in the electricity market. This paper addresses this issue by analyzing how the ERCOT market is affected by CO2 penalty and wind penetration. In order to assess the future power system, the study model should represent the long term dynamics of various factors to find out how investment decisions are made economically in a competitive market with appropriate assumptions. Another important aspect is the short term market dynamics from real operation of power system. For this study, AURORAxmp, a commercially available market simulator, is utilized to capture both long term and short term dynamics. This study runs 5 different scenarios: two base cases with and without CO2 price, 20%, 27%, and 33% wind penetration level. The result shows that, increasing wind penetration reduces production and capacity of both coal and gas units, electricity market prices, and amount of emissions. However, increasing wind penetration has greater impacts on a decrease in generation from thermal units than reduction in thermal capacity, resulting in 11.4% capacity value of wind power. The study also confirms that CO2 price impacts capacity and generation of coal (negatively) and gas (positively) units in opposite ways, and reduces emission, but increases power prices and generation cost. Especially, the impact on retirement of coal units is noticeable. Almost half of the current coal capacity (19 GW), 9,390 MW, is retired by 2040 in this study.