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State Policy Options to Price Carbon from Electricity

Author

Listed:
  • Burtraw, Dallas

    (Resources for the Future)

  • Palmer, Karen

    (Resources for the Future)

  • Paul, Anthony

    (Resources for the Future)

  • Picciano, Paul

    (Resources for the Future)

Abstract

We examine cap and trade in the electricity sector in North Carolina, Pennsylvania, and in a group of four Midwest states (Minnesota, Wisconsin, Illinois, Michigan).Cumulative emissions reductions of 25 percent can be achieved in the next decade at low cost. Ten percent are accelerated reductions due low allowance prices, suggesting greater ambition is plausible.Policies to directly promote renewables achieve greater use of renewables but fewer emissions reductions than cap and trade. However, renewable capacity can help achieve emissions reductions in the long run. A combination of approaches is possible.We examine “trade ready” program design and a level of stringency that would readily allow linking with the Regional Greenhouse Gas Initiative.

Suggested Citation

  • Burtraw, Dallas & Palmer, Karen & Paul, Anthony & Picciano, Paul, 2019. "State Policy Options to Price Carbon from Electricity," RFF Reports 19-04, Resources for the Future.
    • Handle: RePEc:rff:report:rp-19-04
    as

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    File URL: https://www.rff.org/documents/2091/RPT_19-04_ezAnXDF.pdf
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    References listed on IDEAS

    as
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    2. Dallas Burtraw & Karen Palmer, 2008. "Compensation rules for climate policy in the electricity sector," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 27(4), pages 819-847.
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    5. Burtraw, Dallas & Kahn, Danny & Palmer, Karen, 2006. "CO2 Allowance Allocation in the Regional Greenhouse Gas Initiative and the Effect on Electricity Investors," The Electricity Journal, Elsevier, vol. 19(2), pages 79-90, March.
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    7. Palmer, Karen & Burtraw, Dallas & Paul, Anthony & Yin, Hang, 2017. "Using Production Incentives to Avoid Emissions Leakage," Energy Economics, Elsevier, vol. 68(S1), pages 45-56.
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