Tanaka, M;
Chen, Y;
Siddiqui, AS;
(2020)
Regulatory jurisdiction and policy coordination: A bi-level modeling approach for performance-based environmental policy.
Journal of the Operational Research Society
, 73
(3)
pp. 509-524.
10.1080/01605682.2020.1843980.
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Abstract
This study discusses important aspects of policy modeling based on a leader-follower game of policymakers. We specifically investigate non-cooperation between policymakers and the jurisdictional scope of regulation via bi-level programming. Performance-based environmental policy under the Clean Power Plan in the United States is chosen for our analysis. We argue that the cooperation of policymakers is welfare enhancing. Somewhat counterintuitively, full coordination among policymakers renders performance-based environmental policy redundant. We also find that distinct state-by-state regulation yields higher social welfare than broader regional regulation. This is because power producers can participate in a single power market even under state-by-state environmental regulation and arbitrage away the CO2 price differences by adjusting their generation across states. Numerical examples implemented for a stylized test network illustrate the theoretical findings.
| Type: | Article |
|---|---|
| Title: | Regulatory jurisdiction and policy coordination: A bi-level modeling approach for performance-based environmental policy |
| Open access status: | An open access version is available from UCL Discovery |
| DOI: | 10.1080/01605682.2020.1843980 |
| Publisher version: | https://doi.org/10.1080/01605682.2020.1843980 |
| Language: | English |
| Additional information: | This version is the author accepted manuscript. For information on re-use, please refer to the publisher's terms and conditions. |
| Keywords: | OR in environment and climate change, bi-level modeling, leader-follower game, power market, performance-based policy |
| UCL classification: | UCL UCL > Provost and Vice Provost Offices > UCL BEAMS UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of Maths and Physical Sciences UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of Maths and Physical Sciences > Dept of Statistical Science |
| URI: | https://discovery.ucl.ac.uk/id/eprint/10127073 |
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