Publications

    Green, Richard, and Iain Staffell. “Richard Green and Iain Staffell - The Contribution of Taxes, Subsidies and Regulations to British Electricity Decarbonisation,” Working Paper.Abstract

    Great Britain’s carbon emissions from electricity generation fell by two-thirds between 2012 and 2019, providing an important example for other nations. This rapid transition was driven by a complex interplay of policies and events: investment in renewable generation, closure of coal power stations, raising carbon prices and energy efficiency measures. Previous studies of the impact of these simultaneous individual measures miss their interactions with each other and with exogenous changes in fuel prices and the weather. Here we use Shapley values, a concept from cooperative game theory, to disentangle these and precisely attribute outcomes (CO2 saved, changes to electricity prices and fossil fuel consumption) to individual drivers. We find the effectiveness of each driver remained stable despite the transformation seen over the 7 years we study. The four main drivers each saved 19–29 MtCO2 per year in 2019, reinforcing the view that there is no ‘silver bullet’, and a multi-faceted approach to deep decarbonisation is essential.

    Adly, Joseph. “Long-term Carbon Policy: The Great Swap.” In, 2016.Abstract

    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.

    and National Academies of Sciences, Engineering, Medicine. “The Power of Change: Innovation for Development and Deployment of Increasingly Clean Electric Power Technologies.” In, 2016.Abstract
    Electricity, supplied reliably and affordably, is foundational to the U.S. economy and is utterly indispensable to modern society. The National Academy of Engineering has called electrification the greatest engineering achievement of the 20th century (Constable and Somerville, 2003). Generating electricity also creates pollution, however, especially emissions of air pollutants. While the most severe and life-threatening pollution from electric power plants is largely a thing of the past in America, power plant emissions of particulates as well as oxides of nitrogen and sulfur (NOx and SOx) 1 still cause harms and contribute to increases in morbidity and mortality (Bell et al., 2008; Laden et al., 2006; Pope et al., 2009). Those harms include premature deaths, contributions to illnesses such as asthma, and increased hospitalizations, and electricity prices do not fully incorporate the costs of those harms (NRC, 2010b). Harms from greenhouse gas (GHG) emissions—to which the power sector is an important contributor, accounting for nearly 40 percent of all domestic emissions (EPA, 2016)— remain almost completely unpriced and thus above the level they would be if market prices reflected their full costs.
    Cullen, Joseph, and Erin Mansur. “Inferring Carbon Abatement Costs in Electricity Markets: A Revealed Preference Approach using the Shale Revolution.” In, 2016.Abstract
    This paper examines how carbon pricing would reduce emissions in the electricity sector. We show how both carbon prices and cheap natural gas reduce, in a nearly identical manner, the historic cost advantage of coal-fired power plants. The shale revolution has resulted in unprecedented variation in natural gas prices that we use to estimate the potential effect of a carbon price. Our estimates imply that a price of $20 ($70) per ton of carbon dioxide would reduce emissions by 5% (10%). Furthermore, carbon prices are much more effective at reducing emissions when natural gas prices are low. In contrast, modest carbon prices have negligible effects when gas prices are at levels seen prior to the shale revolution.
    Borenstein, Severin, James Bushnell, Frank Wolak, and Matthew Zaragoza-Watkins. “Expecting the Unexpected: Emissions Uncertainty and Environmental Market Design." .” In Energy Institute at Haas. Berkeley University. 2016.Abstract

    We study potential equilibria in California’s 2013-2020 cap-and- trade market for greenhouse gasses (GHGs) based on information available before the market started. We find large ex ante uncer- tainty in business-as-usual emissions, and in the abatement that might result from non-market policies, compared to the market- based variation that could plausibly result from changes in al- lowance prices within a politically acceptable range. This implies that the market price is very likely to be determined by an admin- istrative price floor or ceiling. Comparable analysis seems likely to reach similar conclusions in most cap-and-trade markets for GHGs, consistent with outcomes to date in such markets.

    Staff White Paper on Guidance Principles for Clean Power Plan Modeling." Federal Energy Regulatory Commission, AD16-14-000, 2016."” In, 2016.Abstract

    Executive summary

    On August 3, 2015, the U.S. Environmental Protection Agency (EPA) issued the Clean Power Plan (CPP) under Clean Air Act 111(d). The CPP limits carbon dioxide emissions from existing fossil fuel-fired electric power plants by providing state specific goals for carbon dioxide emissions from affected electric generating units. As part of the CPP, EPA considered the potential impacts of the CPP on electric system reliability. Specifically, the CPP requires each state to demonstrate in its final state plan submittal that it has considered reliability issues in developing its plan. Separately, on August 3, 2015, EPA, the U.S. Department of Energy (DOE) and the Commission agreed to coordinate certain activities to help ensure continued reliable electricity generation and transmission during the implementation of the CPP. 

    While the CPP assigns no direct role to the Commission, it is possible that the Commission may be called upon, through the EPA-DOE-FERC Coordination Document or for other reasons, to address concerns about reliability as the CPP is implemented. In that case, the use of appropriate modeling tools and techniques will be helpful to the Commission in carrying out its responsibilities for reliability.

     This white paper identifies four guiding principles that may assist transmission planning entities, which may include regional transmission organizations (RTOs), independent system operators (ISOs), electric utilities, or other interested stakeholders, in conducting effective analysis of the CPP and associated state plans, federal plans or multi-state plans (compliance plans). The North American Electric Reliability Corporation (NERC) and the regional electric reliability organizations may also benefit from following these guiding principles as they perform CPP-related analyses. These guiding principles address four areas: (1) transparency and stakeholder engagement; (2) study methodology and interactions between studies; (3) study inputs, sensitivities and probabilistic analysis; and (4) tools and techniques.

    Incorporating these guiding principles in the modeling of the CPP compliance plans is one way to promote a robust analysis of the reliability impacts of the CPP. The guiding principles discussed herein may form the basis for additional action by staff, such as industry outreach or technical conferences, or future action by the Commission.

    Hogan, William W.Electricity Markets and the Clean Power Plan.” In, 2015. Publisher's VersionAbstract
    The Environmental Protection Agency issued a final rule that defines a broad and complicated set of standards for controlling carbon dioxide (CO2) emissions from affected electricity generating units. (Environmental Protection Agency, 2015b) The proposed national average reduction by 2030 is 32% from the 2005 level of emissions, about half of which has already occurred. (Environmental Protection Agency, 2015j) The rules for new power plants are relatively straightforward and imply little more than reinforcing the current economic choice of natural gas over coal fired generation, given current projections for the price of natural gas. The Clean Power Plan rules for existing power plants arise under a different section of the Clean Air Act and present a more complicated picture. The result has implications for the nature and degree of future limitations on carbon dioxide emissions from the electricity sector. In addition, some versions of the possible implementation plans could have material implications for the operations of Regional Transmission Organizations under the regulations of the Federal Energy Regulatory Commission. The purpose here is to highlight some of the possible directions for relevant policies of electricity system operators.
    Taylor, Jerry.The Conservative Case for a Carbon Tax.” In, 2015.Abstract
    Costly and economically inefficient command-and-control greenhouse gas regulations are firmly entrenched in law, and there is no plausible scenario in which they can be removed by conservative political force. Even were that not the case, the risks imposed by climate change are real, and a policy of ignoring those risks and hoping for the best is inconsistent with risk management practices conservatives embrace in other, non-climate contexts. Conservatives should embrace a carbon tax (a much less costly means of reducing greenhouse gas emissions) in return for elimination of EPA regulatory authority over greenhouse gas emissions, abolition of green energy subsidies and regulatory mandates, and offsetting tax cuts to provide for revenue neutrality. Arguments that unilateral action by the United States produces little climate benefit, that a carbon tax will expand the size of government, that a carbon tax is a regressive, that adaptation and geo-engineering is preferable to emissions constraint, that economists cannot confidently design a carbon tax that does more good than harm, that the legislative process cannot deliver a carbon tax worth embracing, and that promoting a carbon tax puts conservatives on a slippery political slope are explored and found wanting.

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