Forfattere: | Benjamin Hampf, Kenneth Løvold Rødseth |
Rapportnr: | 8432/2014 |
ISBN (elektronisk versjon): | ISSN 1438 - 2733 |
Språk: | English |
On June 25, 2013, President Obama announced his plan to introduce carbon dioxide
emission standards for electricity generation. This paper proposes an efficiency analysis
approach that addresses which emission rates (and standards) would be feasible if the existing
generating units adopt best practices. A new efficiency measure is introduced and
further decomposed to identify different sources’ contributions to emission rate improvements.
Estimating two Data Envelopment Analysis (DEA) models - the well-known
joint production model and the new materials balance model - on a dataset consisting
of 160 bituminous-fired generating units, we find that the average generating unit’s
electricity-to-carbon dioxide ratio is 15.3 percent below the corresponding best-practice
ratio. Further examinations reveal that this discrepancy can largely be attributed to
non-discretionary factors and not to managerial inefficiency. Moreover, even if the best
practice ratios could be implemented, the generating units would not be able to comply
with the EPA’s recently proposed carbon dioxide standard.