Significant increases in prices and price volatility of natural gas and electricity have raised interest in the potential economic opportunities for electricity storage. In this paper, we analyze the arbitrage value of a price-taking storage device in PJM during the six-year period from 2002 to 2007, to understand the impact of fuel prices, transmission constraints, efficiency, storage capacity, and fuel mix. The impact of load-shifting for larger amounts of storage, where reductions in arbitrage are offset by shifts in consumer and producer surplus as well as increases in social welfare from a variety of sources, is also considered
This paper examines carbon tax design options in the United States using an intertemporal computable general equilibrium model of the world economy called G- Cubed. Four policy scenarios explore two overarching issues: (1) the effects of a carbon tax under alternative assumptions about the use of the resulting revenue, and (2) the effects of a system of import charges on carbon-intensive goods (“border carbon adjustments”).
Excerpt trom the Introduction:
In the past two decades, the mounting risks posed by climate change have motivated businesses, cities, states, national governments, and the international community to pledge to take action to reduce their greenhouse gas emissions. Given the scale of the problem, the breadth of action must be effective and must set the foundation for increasing mitigation efforts over time. Thus, delivering on these pledges will require effective policies to drive the deployment of low-carbon technologies today and technological innovation in the future to ramp ambition up on par with the risks of climate change.
Climate change is a problem no country can solve by itself. Since the mid-1990s, the United States has advocated for developed and developing countries to work together in combating climate change and, with the United States' leadership, the 2015 Paris Agreement delivered unprecedented commitments by virtually every country on the planet to reduce their greenhouse gas emissions. Now, the election of Donald J. Trump, an avowed global warming skeptic, has thrown America's commitment to global leadership in doubt. If the United States quits the fight against climate change, this risks unraveling the global coalition and could result in other countries following suit. This would be a tragic mistake with incalculable consequences for the entire planet. Moreover, some nations may retaliate against the United States by imposing tariffs on American-manufactured goods based on the greenhouse gas emissions associated with their production.
Excerpt from the Executive Summary
Acting under its existing authorities under the Clean Air Act (CAA), the U.S. Environmental Protection Agency (EPA) has been developing proposals designed to reduce carbon dioxide (CO2) emissions from new and existing fossil-fuel power plants in the United States.
Power production is the nation’s largest source of carbon emissions, contributing 37 percent of all CO2 emissions in the U.S. This will be the first time that federal policy will broadly address CO2 emissions from the power sector, and EPA’s new policies will affect over half of the nation’s existing generating capacity.
EPA and the electric sector have a long track record of successful market-based, regional emission-allowance-trading programs, which can serve as a template for the regulation of CO2 emissions.
Such programs – for example, the Acid Rain sulfur dioxide (SO2) trading Program, the “NOx SIP Call,” and the Regional Greenhouse Gas Initiative (RGGI) – provide price signals to power plant owners so that they can make their own choices about their lowest-cost path to compliance. These programs have proven to allow for environmental improvements at much lower cost to both power plant owners and electricity consumers.
There is a natural fit between market-based emission-control programs and competitive wholesale power markets.
Most of the power plants covered by EPA’s Clean Power Plan operate in competitive wholesale electric markets administered by an Independent System Operator (ISO) or Regional Transmission Organization (RTO) (collectively “RTO”). These regions span more than two-thirds of the states, encompass 70 percent of the nation’s generating capacity, and serve the electricity needs of twothirds of the American people.