Vintage differentiated regulations and plant survival: Evidence from coal-fired power plants

We assess the effect of vintage differentiation of regulations (VDRs) regarding air pollution emission limit values on the survival of coal-fired power plants. We apply survival analysis techniques on a sample of generating units across 31 OECD and non-member countries between 1962 and 2012. We find that greater vintage differentiation is associated with significantly higher age at exit of a plant – by up to 14 years. Using the results, we are able to simulate the trade-off relationship between stringency and vintage differentiation in achieving desired emission levels and demonstrate the magnitude of the potential air pollution impacts.