Environmental implications of market structure: Shale gas and electricity markets
Name
KMT_IJIO.pdf
Description
Submitted version
Size
2.19 MB
Format
Adobe PDF
Checksum (MD5)
8b71051386466380955891f901c24ae4
Author(s)
Knittel, Christopher Roland
Metaxoglou, Konstantinos
Trindade, André
Date Issued
March 2019
Journal
International Journal of Industrial Organization
Publisher
Elsevier BV
Citation
Knittel, Christopher R. et al. "Environmental implications of market structure: Shale gas and electricity markets." International Journal of Industrial Organization 63 (March 2019): 511-550 © 2019 Elsevier B.V.
Version
Original manuscript
Abstract
We examine the environmental implications of market structure using the exogenous variation in the price of natural gas paid by U.S. electric power producers in the aftermath of the Shale Boom. We find that electric power producers were more responsive to fuel prices in vertically integrated markets than in restructured markets, and we explore the underlying factors driving this heterogeneity in responses. Although differences in the capacity of the most efficient gas power plants between the two market structures are the most important factor, we consider others. The heterogeneity in the response of power plant operators to fuel prices has material implications for carbon dioxide emissions.
MIT Department
Sloan School of Management
Terms of Use
Creative Commons Attribution-NonCommercial-NoDerivs License
Persistent DSpace Link
DOI of Published Version
https://doi.org/10.1016/j.ijindorg.2018.12.004
