UC Davis Institute of Transportation Studies

This paper reviews the regulatory history for nitrogen oxides (NOx) pollutant emissions from stationary sources,primarily in coal-fired power plants. Nitrogen dioxide (NO2) is one of the six criteria pollutants regulated by the 1970 Clean Air Act where National Ambient Air Quality Standards were established to protect public health and welfare. We use patent data to show that in the cases of Japan, Germany, and the United States, innovations in NOx control technologies did not occur until stringent government regulations were in place, thus “forcing” innovation. We also demonstrate that reductions in the capital and operation and maintenance (O&M) costs of new generations of high-efficiency NOx control technologies, selective catalytic reduction (SCR), are consistently associated with the increasing adoption of the control technology: the so-called learning-by-doing phenomena. The results show that as cumulative world coal-fired SCR capacity doubles, capital costs decline to 86% and O&M costs to 58% of their original values. The observed changes in SCR technology reflect the impact of technological advance as well as other factors, such as market competition and economies of scale.