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Capturing climate’s effect on pollution abatement with an improved solution to the omitted variables problem. (English) Zbl 1147.90022

Summary: Climate greatly affects the SO\(_{2}\) concentration abatement efforts of Mae Moh power plant which burns high sulfur content lignite in Northern Thailand. In summer months, hot air rising draws Mae Moh’s SO\(_{2}\) emissions out of the Mae Moh valley. In contrast, temperature inversions in winter months prevent hot air in the valley from rising, resulting in the trapping and concentrating of SO\(_{2}\) emissions in the valley. The climatic conditions that affect Mae Moh’s abatement efforts are so complex that adequately modeling them has been elusive. In this paper we use a new analytical technique, BD-RTPLS, which produces reduce form estimates while minimizing the influence of omitted variables, like climate. Using BD-RTPLS and monthly data, we tell Mae Moh how much electricity needs to be sacrificed from which generating units to most efficiently reduce SO\(_{2}\) concentrations in any given month.

MSC:

90B99 Operations research and management science
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