A cost comparison of alternative policies for sulphur dioxide control : The case of the British power plant sector

The paper is concerned with the costs of achieving overall reduction targets for sulphur dioxide (SO₂) emissions of the British electricity sector under two alternative regulatory strategies: uniform limits to SO₂ concentration in flue gas and transferable emission permits. The implications of the SO₂ abatement technology for the allocation of abatement activities under the two types of regulation are analysed, and overall abatement costs are compared. An aggregate cost function is developed which may serve, together with transboundary SO₂ transfer coefficients, as a basis for efficiently setting overall emission reduction targets for countries participating in a coordinated SO₂ control policy.