This paper analyzes the impact of deregulation and restructuring on public-interest environmental research conducted by electric utilities in the US from 1990 to 2001. I find that deregulation has had a substantial negative impact on such expenditures, which have declined by 40%. However, restructuring has had no significant impact. In addition, the 1990 Clear Air Act Amendments have adversely affected such expenditures, contrary to the positive impact these regulations had on pollution abatement R&D as shown in the literature. Results also suggest that state and firm characteristics and regulator preferences play a strong role in the conduct of such research.
This is a preview of subscription content, access via your institution.
Buy single article
Instant access to the full article PDF.
Tax calculation will be finalised during checkout.
Subscribe to journal
Immediate online access to all issues from 2019. Subscription will auto renew annually.
Tax calculation will be finalised during checkout.
Arora S., Cason T.N. (1999). Do community characteristics influence environmental outcomes? Evidence from the toxic release inventory. Southern Economic Journal 65(4): 691–716
Blumstein C., & Bushnell J. (1994) A Guide to the Blue Book: Issues in California’s Electric Industry Restructuring and Reform. Electricity Journal, 7, September.
Blumstein C. (1997). What is public interest R&D. Energy Views. POWER Notes Newsletter. Fall. University of California Energy Institute, Berkeley.
Borenstein S., & Bushnell J. (1997). An empirical analysis of market power in a deregulated California electricity market. Power Working Paper. no. 44r. University of California Energy Institute, Berkeley.
Bushnell J., & Stoft S. (1995) Transmission and generation investment in a competitive electric power industry, California Energy Commission. Power Working Paper. no. 30 1995, University of California Energy Institute, Berkeley.
Cohen W.M., & Levin R.C. (1989). Empirical studies of innovation and market structure. In R. Schmalensee & R. Willig (Eds.), Handbook of industrial organization. (Vol. II, Chap. 18). North Holland, Amsterdam: Elsevier Science Publishers.
DeCanio S.J., Watkins W.E. (1998). Investments in energy efficiency: Do the characteristics of firms matter?. Review of Economics and Statistics 80(1): 95–107
Dixit A., Pindyck R. (1994). Investment under Uncertainty. Princeton, NJ, Princeton University Press
Dooley J.J. (1996). Energy R&D in the United States, Prepared for U.S. Department of Energy under Contract DE-AC06-76RLO 1830, Pacific Northwest National Laboratory, operated for the U.S. Department of Energy by Battelle Memorial Institute. PNNL 12188
Energy and Environment Subcommittee (March 31st, 1998). Electric utility deregulation: Implications for research and development. US House of Representatives. Committee on Science, Subcommittee on Energy and Environment.
GAO Report (1996). Federal research: Changes in electricity-related R&D funding. Statement of Victor S. Rezendes, Director, Energy, Resources and Science Issues Resources. Community and Economic Development Division, Testimony before the Subcommittee on Energy and Environment, Committee on Science, House of Representatives, GAO/T-RCED-96-203
GAO Report (1998). Electric utility restructuring—Implications for electricity R&D. Statement of Victor S. Rezendes, Director, Energy, Resources and Science Issues, Resources, Community and Economic Development Division, Testimony before the Subcommittee on Energy and Environment, Committee on Science, House of Representatives, GAO/T-RCED-98-144.
Gollop F.M., Roberts M.J. (1983). Environmental regulations and productivity growth—The case of fossil-fueled electric power generation. The Journal of Political Economy 91(4): 654–674
Hassett K.A., Metcalf G.E. (1993). Energy conservation investment. Energy Policy 21(6): 710–716
Hirsch R.L. (1998). Statement before the Subcommittee on Energy and the Environment of the Committee of Science of the US House of Representatives on the Subject of Electric Utility Deregulation, March 31.
Jaffe A.B., Newell R.G., Stavins R.N. (2002). Environmental policy and technological change. Environmental and Resource Economics 22(1): 41–70
Jaffe A.B., Palmer K. (1997). Environmental regulation and innovation: A panel data study. Review of Economics and Statistics 79(4): 610–619
Joskow P. (1999). Deregulation and regulatory reform in the US electric power sector. Discussion draft for Brookings AEI Conference on Deregulation in Network Industries.
Joskow P. (1997). Restructuring, competition, and regulatory reform in the US electric sector. Journal of Economic Perspectives 11(3): 119–138
Kamien M.I., Schwartz N.L. (1975). Market structure and innovation: A survey. Journal of Economic Literature 13(1): 1–37
Kennedy P. (1981). Estimation with correctly interpreted dummy variables in semilogarithmic equations. American Economic Review71: 801
Lunn J. (1986). An empirical analysis of process and product Patenting: A simultaneous equation framework. Journal of Industrial Economics 34(3): 319–330
Magat W.A. (1976). Regulation and the rate and direction of induced technical change. The Bell Journal of Economics 7(2): 478–496
Pechman C. (1993). Regulating power: The economics of electricity in the information age. Kluwer Academic Publishers.
Popp D. (2002). Induced innovation and energy prices. American Economic Review 92(1): 160–180
Popp D. (2003). Pollution control innovations and the clean air act of 1990. Journal of Policy Analysis and Management 22(4): 641–660
Rajan R.G., Zingales L. (1995). What do we Know about capital structure? Some evidence from international data. The Journal of Finance 50(5): 1421–1460
Riorden M.H. (1992). Regulation and preemptive technology adoption. The Rand Journal of Economics 23(3): 334–349
Taylor M.R., Rubin E.S., Hounshell D.A. (2005). Regulation as the mother of innovation: The case of SO2 control. Law and Policy 27(2): 348–358
Taylor M.R., Rubin E.S., Hounshell D.A. (2003). The effect of government actions on technological innovation for SO2 Control. Environmental Science and Technology 37(20): 4527–4534
Testimony (March 31, 1998). Electric utility deregulation: implications for research and development. U.S. House of Representatives, Committee on Science, Subcommittee on Energy and Environment.
About this article
Cite this article
Sanyal, P. The effect of deregulation on environmental research by electric utilities. J Regul Econ 31, 335–353 (2007). https://doi.org/10.1007/s11149-007-9023-2
- Electricity deregulation
- Environmental R&D
- Clean Air Act