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

Resources for the Future Discussion Paper 14-01

18 Pages Posted: 4 May 2014

See all articles by Dallas Burtraw

Dallas Burtraw

Resources for the Future

Joshua Linn

Resources for the Future

Karen L. Palmer

Resources for the Future

Anthony C. Paul

Resources for the Future

Date Written: January 14, 2014

Abstract

US climate policy is unfolding under the Clean Air Act. Mobile source and construction permitting regulations are in place. Most important, the US Environmental Protection Agency (EPA) and the states will determine the form and stringency of the regulations for existing power plants. It is widely believed that flexible approaches could be suggested in EPA guidelines or proposed by states. 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 three variations on cap-and-trade policies that would distribute the asset value in different ways. Keeping the value within the electricity sector by distributing it to fossil-fueled producers or consumers or spending on energy efficiency has smaller effects on average electricity prices than a revenue-raising policy. These approaches impose greater social cost, but comparable net benefits in the sector.

Keywords: climate policy, efficiency, equity, Clean Air Act, coal, compliance flexibility, regulation

JEL Classification: Q54, Q58

Suggested Citation

Burtraw, Dallas and Linn, Joshua and Palmer, Karen and Paul, Anthony C., The Costs and Consequences of Clean Air Act Regulation of CO2 from Power Plants (January 14, 2014). Resources for the Future Discussion Paper 14-01, Available at SSRN: https://ssrn.com/abstract=2432175 or http://dx.doi.org/10.2139/ssrn.2432175

Dallas Burtraw (Contact Author)

Resources for the Future ( email )

1616 P Street, NW
Washington, DC 20036
United States
202-328-5087 (Phone)

Joshua Linn

Resources for the Future ( email )

1616 P Street, NW
Washington, DC 20036
United States

Karen Palmer

Resources for the Future ( email )

1616 P Street, NW
Washington, DC 20036
United States

Anthony C. Paul

Resources for the Future ( email )

1616 P Street, NW
Washington, DC 20036
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
118
Abstract Views
2,356
rank
262,941
PlumX Metrics