The impact of the particulate matter management policy on the electric power sector in South Korea: evidence from coal-fired generators

Given the substantial contribution of coal-fired power generation to environmental pollution in South Korea, evaluating the effectiveness of policies in the electric power sector is essential. The South Korean government has implemented the particulate matter management policy (PMMP) in the electric power sector to control coal-fired emissions. However, current policy evaluation reports are limited and, when available, are conducted at the plant level, which leads to a biased estimate. This study examines the impact of PMMP on the electric power sector in South Korea, with a focus on the coal-fired generators. A difference-in-differences approach is employed to estimate the effect of PMMP and compiles data from representative power companies on electric generation and emissions from 2014 to 2019. The findings suggest that PMMP is associated with a 50.1% reduction in nitrogen oxides (NO _X ) emissions and a 25% reduction in total suspended particles (TSP) emissions. Furthermore, the estimates of emission intensity are consistent with reductions of 53% for NO x and 30% for TSP. Based on the estimates, this study calculates the environmental benefits associated with PMMP implementation at USD 7.24 billion per year. These results suggest that the electric power sector is important in advancing environmental sustainability.