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Additional info for Social Costs of Energy: Present Status and Future Trends

Example text

And the marginal control cost at the source selling the permits is internalized in the bid of the new source through the necessity to purchase permits at Pi =3P*. So, the adder is zero in the case of a permit system with optimally designed trading rules. 12 For details concerning optimal trading rules, see, for example, Tietenberg (1985), or Bohm and Russell (1985). 26 Table 2: Marginal Social Costs of Production at a New Source in the Case of Tradable Emissions Permits when the Pollutant is not Uniformly-Mixing 1.

Processes now used to estimate the cost of "environmental damage" should continue to be evaluated as a component of cost-benefit analyses. Information from such evaluations may provide useful data to influence new and revised environmental laws and regulations. The appropriate role for rate regulators is to insure that utilities anticipate the potential for such changes and factor them into their resource plans. References and Endnotes 1 See written testimony of John W. S. House of Representatives Committee on Energy and Commerce, Subcommittee on Energy and Power.

This would encourage sources to develop and implement relatively low cost emission reduction programs, consistent with scientific evidence on the cost of damage. Credits should be given for emissions offsets. Each affected party could then assess its control and offset opportunities, and determine the best economic course of action. " 2 The name "New England Electric System" means the trustee or trustees for the time being (as trustee or trustees, but not personally) under an agreement and declaration of trust dated January 2, 1976, as amended, which is hereby referred to, and a copy which as amended has been filed with the Secretary of the Commonwealth of Massachusetts.

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