ENVIRONMENTAL REGULATIONS AND INTERFUEL SUBSTITUTION N THE POWER SECTOR: A GENERALIZED LEONTIEF MODEL

摘要

This paper analyzes short-run interfuel substitution between fossil fuels in West European power generation, and the impact of SO_2 regulations on fossil fuel choices. These problems are studied within a short-run Generalized Leontief cost function. The empirical results indicate that price-induced interfuel substitution in existing power plants is substantial in West Europe, especially that between oil and gas.