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The Costs and Consequences of Clean Air Act Regulation of CO2 from Power Plants

Author

Listed:
  • Dallas Burtraw
  • Josh Linn
  • Karen Palmer
  • Anthony Paul

Abstract

US climate policy is unfolding under the Clean Air Act. Mobile source and construction permitting regulations are in place. Most important, EPA and the states will determine the form and stringency of the regulations for power plants. Various approaches would create an implicit price on emitting greenhouse gases and create valuable assets that would be distributed differently among electricity producers, consumers, and the government. We compare a tradable performance standard with several cap-and-trade policies. Distributing asset values to fossil-fueled producers and consumers has small effects on average electricity prices but imposes greater social cost than a revenue-raising policy.

Suggested Citation

  • Dallas Burtraw & Josh Linn & Karen Palmer & Anthony Paul, 2014. "The Costs and Consequences of Clean Air Act Regulation of CO2 from Power Plants," American Economic Review, American Economic Association, vol. 104(5), pages 557-562, May.
  • Handle: RePEc:aea:aecrev:v:104:y:2014:i:5:p:557-62
    Note: DOI: 10.1257/aer.104.5.557
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    Citations

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

    1. E. Mark Curtis, 2014. "Who Loses Under Power Plant Cap-and-Trade Programs?," NBER Working Papers 20808, National Bureau of Economic Research, Inc.
    2. repec:eee:jeeman:v:87:y:2018:i:c:p:1-23 is not listed on IDEAS
    3. Tol, Richard S.J., 2017. "The structure of the climate debate," Energy Policy, Elsevier, vol. 104(C), pages 431-438.
    4. Christian von Hirschhausen, 2014. "The German Energiewend - An Introduction," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 2).
    5. Kantamneni, Abhilash & Winkler, Richelle & Gauchia, Lucia & Pearce, Joshua M., 2016. "Emerging economic viability of grid defection in a northern climate using solar hybrid systems," Energy Policy, Elsevier, vol. 95(C), pages 378-389.
    6. repec:eee:jeeman:v:87:y:2018:i:c:p:52-71 is not listed on IDEAS
    7. Healey, Stephen & Jaccard, Mark, 2016. "Implications of a US electricity standard for final energy demand," Energy Economics, Elsevier, vol. 60(C), pages 469-475.
    8. Newbery, D. & Reiner, D. & Ritz, R., 2018. "When is a carbon price floor desirable?," Cambridge Working Papers in Economics 1833, Faculty of Economics, University of Cambridge.
    9. repec:eee:eneeco:v:68:y:2017:i:s1:p:45-56 is not listed on IDEAS
    10. Zhou, Yishu & Huang, Ling, 2016. "Have U.S. power plants become less technically efficient? The impact of carbon emission regulation," Energy Economics, Elsevier, vol. 58(C), pages 105-115.

    More about this item

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • 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

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