CEnREP alumnus Jonathan Lee’s research evaluates policies designed to reduce manufacturing pollution.
By Danielle Herman
Instead of purchasing from electricity utilities, it’s more energy efficient and cleaner for the environment if manufacturing plants create their own onsite electricity as they typically use a cleaner burning fuel, like natural gas. It’s better for the environment, but some regulations discourage manufacturing plants from making their own electricity.
Dr. Jonathan Lee, an assistant professor of economics at East Carolina University, received his PhD in economics from NCSU in 2012 and researches regulations and the energy market.
“One of the overarching themes of my current research is looking at is energy prices and environmental policies — do these two things encourage manufacturing plants to adopt best management practices with respect to their energy use?” he said. “And then, more importantly, once we understand how the manufacturers are responding to energy policies and environmental regulations, can we start to think about designing better environmental policies that accomplish energy efficiency and pollution reductions?”
Lee has a paper currently under review titled “The Impact of Heterogeneous NOx Regulations on Distributed Electricity Generation in U.S. Manufacturing.” Lee and his colleagues’ research found that an emissions standard for nitrogen oxide (NOx) discourages firms from generating onsite electricity. But a market-based incentive like “cap-and-trade” does not discourage plants from doing so. Cap-and-trade encourages companies to reduce emissions because if a company doesn’t exceed its limit, it can sell its leftover permits.
In addition to the reduction in NOx emissions, Lee and his colleagues also found that market-based incentives led to 22 to 64 percent reductions in emissions of carbon dioxide, particulate matter, volatile organic compounds and carbon monoxide.
“With a market-based system, the regulated manufacturing companies have some autonomy in the methods that they use for reducing their energy use, and those seem to work better at encouraging energy efficiency” Lee said.
In addition to this paper, Lee has published and is working on several others that address these kinds of questions. A working paper titled “Heterogeneous Effects of Renewable Portfolio Standards: The Case of Solar and Wind” found that renewable portfolio standards, or subsidies for renewable energy generation, do increase solar capacity, particularly in states with higher amounts of sunshine, but they do not have as great of an effect on wind energy. However, the paper found that with the current technologies in use for wind and solar, wind energy is overall more economically viable compared to solar.