Byron Swift, in Tulane Environmental Law Journal, Vol. 14, No. 2, pp. 309–425 (Summer 2001).© 2001 by Tulane Environmental Law Journal. All rights reserved. Posted with permission from Tulane Environmental Law Journal.

With this reprint, the Center for Energy and Environmental Policy Research (CEEPR) makes an exception to its normal practice of publishing only articles attributable to research in energy and environmental economics funded by the Center. We make an exception with this article because of the important contribution that it makes to the subject of improving environmental regulation and the article’s heavy reliance upon research sponsored by CEEPR.

This study is designed to examine the actual performance of environmental regulations and the compliance behavior of regulated business in a real-world setting. It focuses on business compliance with regulatory standards for nitrogen oxides and sulfur dioxide in the electric power industry from 1995 through 1999. The selected time period permits evaluation of Phase I of Title IV of the Federal Clean Air Act, enacted in 1990 to regulate utility emissions of sulfur dioxide and nitrogen oxides. This allows comparison of the two contrasting approaches Title IV imposed on electricity-generating facilities: an emissions cap and allowance trading program for sulfur dioxide, the most ambitious such program operating in the United States, and a more traditional technology-based emission rate standard to control nitrogen oxides emissions. The study also compares these standards to the new source standards for nitrogen oxides and sulfur dioxide in effect during the 1995-99 period, providing findings about business behavior in the face of varied regulatory standards.