IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v42y2012icp67-77.html
   My bibliography  Save this article

Retail electricity price savings from compliance flexibility in GHG standards for stationary sources

Author

Listed:
  • Burtraw, Dallas
  • Woerman, Matt
  • Paul, Anthony

Abstract

The EPA will issue rules regulating greenhouse gas (GHG) emissions from existing steam boilers and refineries in 2012. A crucial issue affecting the scope and cost of emissions reductions will be the potential introduction of flexibility in compliance, including averaging across groups of facilities. This research investigates the role of compliance flexibility for the most important of these source categories—existing coal-fired power plants—that currently account for one-third of national emissions of carbon dioxide, the most important greenhouse gas. We find a flexible standard, calibrated to achieve the same emissions reductions as a traditional(inflexible) approach, reduces the increase in electricity price by 60 percent and overall costs by two-thirds in 2020. The flexible standard also leads to substantially more investment to improve the operating efficiency of existing facilities, whereas the traditional standard leads to substantially greater retirement of existing facilities.

Suggested Citation

  • Burtraw, Dallas & Woerman, Matt & Paul, Anthony, 2012. "Retail electricity price savings from compliance flexibility in GHG standards for stationary sources," Energy Policy, Elsevier, vol. 42(C), pages 67-77.
    • Handle: RePEc:eee:enepol:v:42:y:2012:i:c:p:67-77
    DOI: 10.1016/j.enpol.2011.11.036
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S030142151100913X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.enpol.2011.11.036?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Winston Harrington & Richard D. Morgenstern & Peter Nelson, 2000. "On the accuracy of regulatory cost estimates," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 19(2), pages 297-322.
    2. Newell, Richard G & Stavins, Robert N, 2003. "Cost Heterogeneity and the Potential Savings from Market-Based Policies," Journal of Regulatory Economics, Springer, vol. 23(1), pages 43-59, January.
    3. Dallas Burtraw & Art Fraas & Nathan Richardson, 2011. "Policy Monitor--Greenhouse Gas Regulation under the Clean Air Act: A Guide for Economists," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 5(2), pages 293-313, Summer.
    4. Burtraw, Dallas & Fraas, Arthur G. & Richardson, Nathan, 2011. "Greenhouse Gas Regulation under the Clean Air Act: A Guide for Economists," RFF Working Paper Series dp-11-08, Resources for the Future.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Burtraw, Dallas & Woerman, Matt, 2013. "Technology Flexibility and Stringency for Greenhouse Gas Regulations," RFF Working Paper Series dp-13-24, Resources for the Future.
    2. Ibanez, Marcela & Blackman, Allen, 2015. "Environmental and Economic Impacts of Growing Certified Organic Coffee in Colombia," RFF Working Paper Series dp-15-02, Resources for the Future.
    3. Bryan K. Mignone & Thomas Alfstad & Aaron Bergman & Kenneth Dubin & Richard Duke & Paul Friley & Andrew Martinez & Matthew Mowers & Karen Palmer & Anthony Paul & Sharon Showalter & Daniel Steinberg & , 2012. "Cost-effectiveness and Economic Incidence of a Clean Energy Standard," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 3).
    4. Paul, Anthony & Palmer, Karen & Woerman, Matt, 2014. "Designing by Degrees: Flexibility and Cost-Effectiveness in Climate PolicyAbstract: Substantially reducing carbon dioxide (CO2) emissions from electricity production will require a transformation of t," RFF Working Paper Series dp-14-05, Resources for the Future.
    5. Joshua Linn & Erin Mastrangelo & Dallas Burtraw, 2014. "Regulating Greenhouse Gases from Coal Power Plants under the Clean Air Act," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 1(1), pages 97-134.
    6. Patrick Bigger, 2018. "Hybridity, possibility: Degrees of marketization in tradeable permit systems," Environment and Planning A, , vol. 50(3), pages 512-530, May.
    7. Burtraw, Dallas & Woerman, Matt, 2013. "Economic ideas for a complex climate policy regime," Energy Economics, Elsevier, vol. 40(S1), pages 24-31.
    8. Anthony Paul & Karen Palmer & Matthew Woerman, 2015. "Incentives, Margins, And Cost Effectiveness In Comprehensive Climate Policy For The Power Sector," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 6(04), pages 1-27, November.
    9. Li, Mingquan & Patiño-Echeverri, Dalia, 2017. "Estimating benefits and costs of policies proposed in the 13th FYP to improve energy efficiency and reduce air emissions of China's electric power sector," Energy Policy, Elsevier, vol. 111(C), pages 222-234.
    10. Burtraw, Dallas & Fraas, Arthur G. & Richardson, Nathan, 2012. "Tradable Standards for Clean Air Act Carbon Policy," RFF Working Paper Series dp-12-05, Resources for the Future.
    11. Bielen, David A., 2018. "Do differentiated performance standards help coal? CO2 policy in the U.S. electricity sector," Resource and Energy Economics, Elsevier, vol. 53(C), pages 79-100.
    12. Xenophon, Aleksis Kazubiernis & Hill, David John, 2019. "Emissions reduction and wholesale electricity price targeting using an output-based mechanism," Applied Energy, Elsevier, vol. 242(C), pages 1050-1063.
    13. Keyes, Amelia & Lambert, Kathleen & Burtraw, Dallas & Buonocore, Jonathan & Levy, Jonathan & Driscoll, Charles, 2018. "Carbon Standards Examined: A Comparison of At-the-Source and Beyond-the-Source Power Plant Carbon Standards," RFF Working Paper Series 18-20, Resources for the Future.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Burtraw, Dallas & Woerman, Matt, 2012. "US Status on Climate Change Mitigation," RFF Working Paper Series dp-12-48, Resources for the Future.
    2. Thomas P. Lyon & John W. Maxwell, 2014. "Self-Regulation and Regulatory Flexibility: Why Firms May be Reluctant to Signal Green," Working Papers 2014-11, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
    3. Yihsu Chen & Andrew Liu, 2013. "Emissions trading, point-of-regulation and facility siting choices in the electric markets," Journal of Regulatory Economics, Springer, vol. 44(3), pages 251-286, December.
    4. Alfred Endres & Tim Friehe, 2013. "The monopolistic polluter under environmental liability law: incentives for abatement and R&D," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 40(3), pages 753-770, March.
    5. Fan, Jin & Li, Jun & Wu, Yanrui & Wang, Shanyong & Zhao, Dingtao, 2016. "The effects of allowance price on energy demand under a personal carbon trading scheme," Applied Energy, Elsevier, vol. 170(C), pages 242-249.
    6. Burtraw, Dallas & Woerman, Matt, 2013. "Economic ideas for a complex climate policy regime," Energy Economics, Elsevier, vol. 40(S1), pages 24-31.
    7. Jihad C. Elnaboulsi & Wassim Daher & Yiğit Sağlam, 2023. "Environmental taxation, information precision, and information sharing," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 25(2), pages 301-341, April.
    8. Joshua Linn & Erin Mastrangelo & Dallas Burtraw, 2014. "Regulating Greenhouse Gases from Coal Power Plants under the Clean Air Act," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 1(1), pages 97-134.
    9. Chen Shi & Yujiao Xian & Zhixin Wang & Ke Wang, 2023. "Marginal abatement cost curve of carbon emissions in China: a functional data analysis," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 28(2), pages 1-25, February.
    10. Norman, Catherine S. & DECANIO, STEPHEN J & Fan, Lin, 2007. "Opportunities and Challenges for the 20th Anniversary of the Montréal Protocol," University of California at Santa Barbara, Economics Working Paper Series qt3t90g0gr, Department of Economics, UC Santa Barbara.
    11. Stavins, Robert, 2001. "Lessons From the American Experiment With Market-Based Environmental Policies," RFF Working Paper Series dp-01-53, Resources for the Future.
    12. Managi, Shunsuke & Opaluch, James J. & Jin, Di & Grigalunas, Thomas A., 2006. "Stochastic frontier analysis of total factor productivity in the offshore oil and gas industry," Ecological Economics, Elsevier, vol. 60(1), pages 204-215, November.
    13. Frank Ackerman, "undated". "The Unbearable Lightness of Regulatory Costs," GDAE Working Papers 06-02, GDAE, Tufts University.
    14. Johannes Urpelainen, 2011. "Frontrunners and Laggards: The Strategy of Environmental Regulation under Uncertainty," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 50(3), pages 325-346, November.
    15. Coxhead, Ian A. & Demeke, Bayou, 2006. "Modeling Spatially Differentiated Environmental Policy in a Philippine Watershed: Tradeoffs between Environmental Protection and Poverty Reduction," 2006 Annual meeting, July 23-26, Long Beach, CA 21115, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    16. Martin Zapf & Hermann Pengg & Christian Weindl, 2019. "How to Comply with the Paris Agreement Temperature Goal: Global Carbon Pricing According to Carbon Budgets," Energies, MDPI, vol. 12(15), pages 1-20, August.
    17. John Loomis & Bryon Allen, 2008. "Using Non Market Valuation to Inform the Choice Between Permits and Fees in Environmental Regulation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 40(3), pages 329-337, July.
    18. Daniel Cardona & Jenny De Freitas & Antoni Rubí-Barceló, 2021. "Environmental policy contests: command and control versus taxes," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 28(3), pages 654-684, June.
    19. Stavins, Robert & Hahn, Robert & Cavanagh, Sheila, 2001. "National Environmental Policy During the Clinton Years," RFF Working Paper Series dp-01-38, Resources for the Future.
    20. Stavins, Robert, 2004. "Environmental Economics," RFF Working Paper Series dp-04-54, Resources for the Future.

    More about this item

    Keywords

    Climate; Efficiency; Flexibility;
    All these keywords.

    JEL classification:

    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:42:y:2012:i:c:p:67-77. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.