Estimation of the marginal abatement costs of airborne pollutants in Korea's power generation sector

Using an output distance function and its duality to the revenue function, we estimated the marginal abatement costs of airborne pollutants of bunker-C and coal fired power plants in Korea. The average marginal abatement costs are 310.6 thousand won per ton for SO2, 146.7 thousand won per ton for NOx, 15482.3 thousand won pier ton for TSP, and 3.8 thousand won per ton for CO2 for the period of 1990-1995. These estimates are well within the range of the results by the previous studies in the US. The wide variations in the marginal abatement costs by the types of plant imply that Korea's regulatory policy on pollution has not achieved the cost-efficiency in reducing emissions. (C) 1999 Elsevier Science B.V. All rights reserved. JEL classification: Q40.