State Efforts to Cap the Commons: Regulating Sources or Consumers?
AbstractCalifornia’s Global Warming Solutions Act (Assembly Bill 32) requires the state to reduce aggregate greenhouse gas emissions to 1990 levels by 2020. One of the challenges California faces is how the state should regulate the electricity sector. About 80 percent of the state’s electricity consumption is generated in the state, but about 52 percent of the greenhouse gas emissions associated with electricity consumption comes from outside the state. The question addressed in this paper is where to locate the point of compliance in the electricity sector—that is, where in the supply chain linking fuel suppliers to generators to the transmission system to retail load-serving entities should the obligation for measurement and compliance be placed. The conclusion offered is that one particular approach to regulating the electricity sector—the “first-seller approach”—would be best for California. The alternative “load-based approach” has a running head start in the policy process but would undermine an economywide marketbased emissions trading program.
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Bibliographic InfoPaper provided by Resources For the Future in its series Discussion Papers with number dp-07-49.
Date of creation: 19 Nov 2007
Date of revision:
electricity; climate; state level; CO2; cap and trade; market-based approaches; load-based; first seller; point of regulation; California; Western Climate Initiative;
Find related papers by JEL classification:
- Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
- Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
- L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
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