Distributional and Efficiency Impacts of Clean and Renewable Energy Standards for Electricity
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Date
2012-07Type
- Report
ETH Bibliography
yes
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Abstract
We examine the efficiency and distributional impacts of greenhouse gas policies directed toward the electricity sector in a model that links a “top-down” general equilibrium representation of the U.S. economy with a “bottom-up” electricity-sector dispatch and capacity expansion model. Our modeling framework features a high spatial and temporal resolution of electricity supply and demand, including renewable energy resources and generating technologies, while representing CO2 abatement options in non-electric sectors as well as economy-wide interactions. We find that clean and renewable energy standards entail substantial efficiency costs compared to an economy-wide carbon pricing policy such as a cap-and-trade program or a carbon tax, and that these policies are regressive across the income distribution. The geographical distribution of cost is characterized by high burdens for regions that depend on non-qualifying generation fuels, primarily coal. Regions with abundant hydro power and wind resources, and a relatively clean generation mix in the absence of policy, are among the least impacted. An important shortcoming of energy standards vis-`a-vis a first-best carbon pricing policy is that no revenue is generated that can be used to alter unintended distributional consequences. Show more
Publication status
publishedJournal / series
Joint Program Report SeriesVolume
Publisher
MIT Joint Program on the Science and Policy of Global ChangeOrganisational unit
03981 - Rausch, Sebastian (ehemalig) / Rausch, Sebastian (former)
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ETH Bibliography
yes
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