NBER Working Papers by Nicholas Muller

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Working Papers

July 2015The Market for Sulfur Dioxide Allowances: What Have We Learned from the Grand Policy Experiment?
with H. Ron Chan, B. Andrew Chupp, Maureen L. Cropper: w21383
We quantify the cost savings from the Acid Rain Program (ARP) by comparing compliance costs for non-NSPS coal-fired generating units under the ARP with compliance costs under a uniform performance standard that achieves the same aggregate emissions. In 2002 we find cost savings of approximately $250 million (1995$). We also compare health damages associated with observed SO2 emissions from all ARP units with damages from a no-trade counterfactual. Damages under the no-trade scenario are $2.4 billion (2000$) lower than under the ARP, reflecting allowance transfers from units in the western to units in the eastern US with higher exposed populations.
June 2015Environmental Benefits from Driving Electric Vehicles?
with Stephen P. Holland, Erin T. Mansur, Andrew J. Yates: w21291
Electric vehicles offer the promise of reduced environmental externalities relative to their gasoline counterparts. We combine a theoretical discrete-choice model of new vehicle purchases, an econometric analysis of the marginal emissions from electricity, and the AP2 air pollution model to estimate the environmental benefit of electric vehicles. First, we find considerable variation in the environmental benefit, implying a range of second-best electric vehicle purchase subsidies from $3025 in California to -$4773 in North Dakota, with a mean of -$742. Second, over ninety percent of local environmental externalities from driving an electric vehicle in one state are exported to others, implying that electric vehicles may be subsidized locally, even though they may lead to negative environme...
February 2013Market-based Emissions Regulation When Damages Vary Across Sources: What Are the Gains from Differentiation?
with Meredith Fowlie: w18801
Much of the air pollution currently regulated under U.S. emissions trading programs is non-uniformly mixed, meaning that health and environmental damages depend on the location and dispersion characteristics of the sources. Existing policy regimes ignore this fact. Emissions are penalized at a single permit price, regardless of the location of the source. In theory, differentiated policies can be designed to accommodate non-uniformly mixed pollution using emissions penalties that vary with emissions damages. Under perfect certainty, damage-based policy differentiation is unambiguously welfare improving. In the presence of uncertainty about damages and abatement costs, differentiated policies need not welfare dominate simpler, undifferentiated designs. Using rich data from a major U.S. emis...

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