4.6 Models Used in Estimating Costs.pdf - Models Used in Estimating Costs Estimating Costs Estimating Costs Types of Models Used in Estimating Costs

4.6 Models Used in Estimating Costs.pdf - Models Used in...

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Models Used in Estimating Costs Estimating Costs Estimating Costs
Types of Models Used in Estimating Costs Estimating Costs
Compliance Cost Models Used to estimate an industry or firm’s direct cost of compliance with a policy or regulation Draws upon engineering and other technical expertise on the costs of adopting various control technologies Often includes capital, O&M, and administrative costs Advantages Often contain significant industry detail and provide relatively precise estimates of direct costs Inexpensive to use and easy to interpret Limitations Focus on supply side so limited ability to estimate social costs Usually limited to a single industry Estimating Costs
Compliance Cost Models: CoST The Control Strategy Tool (CoST) is a tool designed to estimate the emission reductions and engineering costs associated with control strategies for point, area, and mobile sources of air pollution. supports national- and regional-scale multi-pollutant analyses, primarily for Regulatory Impact Analyses (RIAs) of the National Ambient Air Quality Standards (NAAQS). It matches control measures to emission sources to achieve the maximum emissions reductions at the least cost. Estimating Costs
Compliance Cost Models: CoST Estimating Costs
Cost Models: Partial Equilibrium If a single market is affected then this is appropriate for social costs (with the usual caveats) Key inputs Regulatory costs from compliance cost model Elasticity estimates (or assumptions) for supply and demand Advantages Modest data requirements and simple to construct Easy to use and interpret Limitations Limited to a single market (or perhaps a few linked markets) Usually not available “off the shelf” and require assembly from available data (including prices, quantities, and elasticities) Estimating Costs
Partial Equilibrium Models: Stationary Compression Ignition Engines

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