Adoption of SO2 emission control technologies - An application of survival analysis

Using data on coal-fired electric power plants, this article investigates the contributing factors affecting the investment decisions on flue-gas desulfurization (FGD), a capital-intensive emission control technology. The paper makes two contributions to the literature. First, the public regulatory status of electric power plants is found to have a strong influence on whether FGD investment is made. Compared to deregulated power plants, those that are still under rate-of-return regulations by Public Utility Commissions are more likely to install FGD. Second, a higher rate of inspections of polluting facilities (not just electric utility power plants) in a state in the previous year is associated with a higher probability of power plants adopting FGD this year. In addition, sulfur content of coal and plant size are both positively associated with the likelihood of FGD installation. The service length of boilers is negatively associated with the likelihood.