Consequences of the IPPC-directive’s BAT requirements for abatement costs and emissions
Abstract
Abstract:
The Integration Pollution and Prevention Control (IPPC) directive from the European Union implies
that the regulatory emission caps should be set in accordance with each industry’s Best Available
Techniques (BAT). The directive is under implementation in Norway, and it represents a refocus of
the Norwegian environmental regulations away from economic efficiency towards a BAT principle.
We examine the effect of this implementation with respect to expected emission reductions and
increases in costs. Data Envelopment Analyses (DEA) is used to construct a frontier of all efficient
plants. This provides us with two alternative interpretations of BAT. First, we assume that all the
plants emit in accordance with the best practice technology, represented by the frontier, by reducing
all inputs proportionally. Second, we assume that all plants emit in accordance with the best practice
technology by reducing emissions only. Both interpretations reveal substantial potential for emission
reductions. Further, abatement cost estimates indicate that considerable emission reductions can be
achieved with low or no social costs, but that the implementation of BAT for all plants involves
substantial costs.
Keywords: IPPC, BAT, Emissions, Energy intensive industries, DEA, Technical efficiency, Frontier
technology.
Publisher
Statistics Norway, Research DepartmentSeries
Discussion Papers;No. 411Related items
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