Some public utility commissions use monetary place-holders to reflect externality values in the financial evaluation of utility investments. This approach can be justified as a "second-best" policy tool if existing environmental regulation can be taken as given. This paper addresses two possible...

For years economists have urged policymakers to use market-based approaches such as cap-and-trade programs or emission taxes to control pollution. The SO2 allowance market created by Title IV of the 1990 U.S. Clean Air Act Amendments represents the first real test of the wisdom of economists’...

A number of state public utility commissions are using "social costing" methods to consider externalities in electricity resource planning. The most comprehensive and formal method is the use of monetary place-holders in the financial evaluation of new investments and potentially in system...

This paper considers how moderate actions to slow atmospheric accumulation of greenhouse gases from fossil fuel use also could reduce conventional air pollutants in the United States. The benefits that result would be “ancillary” to greenhouse gas abatement. Moreover, the benefits would tend...

Many state public utility commissions (PUCs) have started to require electric utilities to consider environmental and other externalities in their planning processes. To date social costing has been applied exclusively to the evaluation of new sources of electricity. More comprehensive...