The Costs and Consequences of Clean Air Act Regulation of CO2 from Power Plants
- (pp. 557-62)
Abstract
US climate policy is unfolding under the Clean Air Act. Mobile source and construction permitting regulations are in place. Most important, EPA and the states will determine the form and stringency of the regulations for power plants. 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 several cap-and-trade policies. Distributing asset values to fossil-fueled producers and consumers has small effects on average electricity prices but imposes greater social cost than a revenue-raising policy.Citation
Burtraw, Dallas, Josh Linn, Karen Palmer, and Anthony Paul. 2014. "The Costs and Consequences of Clean Air Act Regulation of CO2 from Power Plants." American Economic Review, 104 (5): 557-62. DOI: 10.1257/aer.104.5.557Additional Materials
JEL Classification
- L51 Economics of Regulation
- L94 Electric Utilities
- L98 Industry Studies: Utilities and Transportation: Government Policy
- Q41 Energy: Demand and Supply; Prices
- Q48 Energy: Government Policy
- Q54 Climate; Natural Disasters; Global Warming
- Q58 Environmental Economics: Government Policy