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Consequences of the IPPC-directive’s BAT requirements for abatement costs and emissions

Larsson, Jan; Telle, Kjetil
Working paper
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dp411.pdf (99.73Kb)
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http://hdl.handle.net/11250/180953
Utgivelsesdato
2005
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  • Discussion Papers [977]
Sammendrag
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.
Utgiver
Statistics Norway, Research Department
Serie
Discussion Papers;No. 411

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