Cost-Benefit Politics in U.S. Energy Policy

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dc.creatorSpence, David B.en
dc.creatorAdelman, David E.en
dc.date.accessioned2016-02-22T16:43:23Zen
dc.date.available2016-02-22T16:43:23Zen
dc.date.issued2015-08-11en
dc.descriptionThe political economy of energy policy in the United States is dominated by partisanship and industry lobbying. Both are reflected in the widespread belief that the Environmental Protection Agency (EPA) is engaged in a misguided “war on coal”—despite decades of regulatory delays, the coal industry’s status as the leading industrial source of air pollution, and compelling evidence that the benefits of EPA’s regulations vastly exceed their costs. The politics are compounded by tensions between electricity managers and environmental regulators. Much of this is driven by competing perspectives: EPA tends to have a national focus, whereas grid managers operate regionally. This Article resolves the apparent conflicts by downscaling the regulatory analyses of three high-profile EPA rules that cover conventional pollutants, air toxics, and greenhouse gases associated with climate change. We utilize complementary EPA databases and draw on several model estimates to examine the regional impacts, both costs and benefits, of regulations targeting coal-fired power plants. Overall we find little evidence of significant regional disparities, as the distribution of compliance costs and benefits is roughly commensurate with each regions’ reliance on coal-fired power, and particularly older facilities. This result follows naturally from the benefits of reducing emissions under these rules being predominantly local; as a consequence, regulatory benefits exceed costs at the regional level and typically by large margins. Further, with a few important caveats, we find that while the EPA rules will encourage many power-plant closures, most will occur in electricity markets that have sufficient excess capacity to mitigate potential threats to electricity supplies and reliability. We conclude that while interest group opposition and political partisanship are clearly both important in this context, the latter appears to hold greater sway based on varying levels of political opposition regionally and may—incrementally—be shifting in EPA’s favor.en
dc.description.departmentThe Kay Bailey Hutchison Center for Energy, Law, and Businessen
dc.identifierdoi:10.15781/T2FH6Jen
dc.identifier.urihttp://hdl.handle.net/2152/33365en
dc.language.isoengen
dc.relation.ispartofKBH Energy Center Research and Publicationsen
dc.rights.restrictionOpenen
dc.subjectair pollutionen
dc.subjectair toxicsen
dc.subjectClimate changeen
dc.subjectcompliance costs and benefitsen
dc.subjectconventional pollutantsen
dc.subjectcost-benefit politicsen
dc.subjectelectricity managersen
dc.subjectelectricity marketsen
dc.subjectemissionsen
dc.subjectEnvironmental Protection Agencyen
dc.subjectenvironmental regulatorsen
dc.subjectEPAen
dc.subjectEPA rulesen
dc.subjectGreenhouse gasesen
dc.subjectgrid managersen
dc.subjectindustry lobbyingen
dc.subjectpartisanshipen
dc.subjectpolitical economy of energy policyen
dc.subjectpower plantsen
dc.subjectU.S. energy policyen
dc.subjectUnited Statesen
dc.subjectwar on coalen
dc.titleCost-Benefit Politics in U.S. Energy Policyen
dc.typeArticleen

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