The Effect of Deregulation on Environmental Research by Electric Utilities

Abstract

Abstract: This paper analyzes the impact of deregulation and restructuring on public-interest environmental research conducted by electric utilities in the US for the period 1990-2001. I find that deregulation has had a tremendous negative on such expenditures which have declined by 40 percent. Restructuring on the other hand, 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 matter and regulator preferences play a strong role in the conduct of such research, with utilities in 'green' states spending more.

Keywords: Environmental R&D, Deregulation, Electric Utilities

JEL Classification: O32, L94, L51