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



Model-1 Dependent Variable: ln (shadow price of CO2)

Variables

Coefficient

t-statistic

Probability

C

8.2629

28.32

0.000

Ln (CO2
emission/power
generation)

R2 = 0.0918_________

- 0.54729

-2.04

0.045

Model-2 Dependent Variable: ln (shadowprice of CO2)

Variables

Coefficient

t-statistic

Probability

C

Ln (CO2

7.8737

26.21

0.000

emission/power
generation)
R2 = 0.1057________

- 0.57931

- 2.10

0.039

Note: Year dummies have been used in estimating both the regressions but are
not reported while presenting the results.

While carrying out the regression analysis we have considered
the natural logarithm
(ln) of the shadow prices as the dependent variable
and the natural logarithm of the efficiency index i.e., the ratio of CO
2
emissions and electricity generation as the independent variable. Year
dummies have been incorporated while regressing the logarithm of
shadow prices on the logarithm of the index of efficiency, but have not
been reported in the results presented above. From the above results,
one can infer that the shadow price of CO
2 or the marginal cost of
abating CO
2 emissions increases with the increase in efficiency of the
power plants. In other words it becomes increasingly difficult or
expensive for a plant, which has invested in pollution abating technology
or equipment and is emitting less of CO
2 per unit of output to reduce an
additional unit of the pollutant
vis-à-vis plants that emit more CO2 per unit
of electricity generation. Thus, for a given level of output the less one
pollutes per unit of output, the higher will be the cost of reducing an
additional unit of the pollutant and
vice versa.

23



More intriguing information

1. The name is absent
2. Wirtschaftslage und Reformprozesse in Estland, Lettland, und Litauen: Bericht 2001
3. Disentangling the Sources of Pro-social Behavior in the Workplace: A Field Experiment
4. The name is absent
5. Keynesian Dynamics and the Wage-Price Spiral:Estimating a Baseline Disequilibrium Approach
6. The name is absent
7. The Advantage of Cooperatives under Asymmetric Cost Information
8. Beyond Networks? A brief response to ‘Which networks matter in education governance?’
9. The name is absent
10. The Functions of Postpartum Depression
11. Are Public Investment Efficient in Creating Capital Stocks in Developing Countries?
12. The name is absent
13. Dementia Care Mapping and Patient-Centred Care in Australian residential homes: An economic evaluation of the CARE Study, CHERE Working Paper 2008/4
14. Novelty and Reinforcement Learning in the Value System of Developmental Robots
15. The name is absent
16. Kharaj and land proprietary right in the sixteenth century: An example of law and economics
17. Firm Creation, Firm Evolution and Clusters in Chile’s Dynamic Wine Sector: Evidence from the Colchagua and Casablanca Regions
18. The name is absent
19. L'organisation en réseau comme forme « indéterminée »
20. 5th and 8th grade pupils’ and teachers’ perceptions of the relationships between teaching methods, classroom ethos, and positive affective attitudes towards learning mathematics in Japan