Environmentally damaging electricity trade
AbstractElectricity trade across regions is often considered welfare enhancing. We show in this paper that this should be reconsidered if environmental externalities are taken into account. We consider two cases where trade is beneficial, before accounting for environmental damages: first, when two regions with the same technology display some demand heterogeneity; second when one region endowed with hydropower arbitrages with its "thermal" neighbor. Our results show that under reasonable demand and supply elasticities, trade comes with an additional environmental cost. This calls for integrating environmental externalities into market reforms when redesigning the electricity sector. Two North American applications illustrate our results: trade between Pennsylvania and New York, and trade between hydro-rich Quebec and New York.
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Bibliographic InfoArticle provided by Elsevier in its journal Energy Policy.
Volume (Year): 38 (2010)
Issue (Month): 3 (March)
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Web page: http://www.elsevier.com/locate/enpol
Electricity trade Hydropower Greenhouse gas emissions;
Other versions of this item:
- Pineau, Pierre-Olivier & de Villemeur, Étienne, 2009. "Environmentally Damaging Electricity Trade," IDEI Working Papers 592, Institut d'Économie Industrielle (IDEI), Toulouse.
- Pineau, Pierre-Olivier & de Villemeur, Étienne, 2009. "Environmentally Damaging Electricity Trade," TSE Working Papers 09-118, Toulouse School of Economics (TSE).
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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