Document Type

Article

Publication Date

2003

Volume

Working Paper 2

Abstract

Quantitative analysis of 47 U.S. electric utilities’ environmental exposures to impending air quality and climate policies shows potentially material and highly differentiated financial impacts. For many companies, the minimized compliance costs of a four-pollutant cap-and-trade regulatory regime would not necessarily exceed those of a three-pollutant regime that omitted controls on carbon dioxide emissions.Fragmented regulatory requirements would have the highest compliance costs. The companies studied vary considerably in the adequacy of their financial reporting of these potential impacts. Greater transparency would benefit investors and the most favorably positioned companies.

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