Estimation of marginal abatement costs for undesirable outputs in India's power generation sector: An output distance function approach.



Table 2: Descriptive Statistics

Variables

Unit

Mean

Std. Dev

Min

Max

Electricity (Y)

Mwh

1874281

1541744

141000

6686101

Capital (K)

MW

469.64

341.52

67.50

1260

Labour (L)

Number

1308

792.48

104

2946

Fuel (F)

Toe

887848.20

735710.10

68720.71

3197387

CO2 (P)

TCO2

2413491

2182987

139013.60

9169197

Note: Sample size is 76; toe = tonnes of oil equivalent; t CO2 = tonnes of carbon
dioxide; Mwh = Megawatt hour; MW = Megawatt; Fuel comprises both coal and
oil consumption.

Electricity Prices: In order to derive the shadow prices of the outputs,
market price of at least one of the output is necessary. As there exists no
market for the undesirable outputs, we do not get the prices for these.
Therefore, to derive the shadow prices of the undesirable outputs we
need to know the price of the desirable output, which in the present case
is electricity. The data on electricity tariffs i.e., the sale price of electricity
is taken as the price of electricity and is obtained from CESC, DVC, and
WBPDCL separately for the different years under consideration.

It should be noted here that the data on CO2 emission is
generated from the consumption of fossil fuels by the thermal plants. As
the data on CO
2 emissions is related to the consumption of fossil fuels,
one cannot use these for econometrically estimating the output distance
function. The unavailability of consistent and reliable plant-wise data on
CO
2 emissions for the years under consideration does not permit us to
estimate the stochastic output distance function by the econometric
method. Hence only deterministic linear programming technique is used
in the present study to derive the shadow prices of undesirable output.

The study considers carbon dioxide, which is one of the
important greenhouse gases, as the only undesirable output in the

19



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