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The U.S. Clean Power Plan stipulates a state-specific performance-based CO2 emission standard, delegating states with considerable flexibility for using either a tradable performance-based or a mass-based permit program. This paper analyzes these two standards under imperfect competitive. We limit our attention to (1) short-run analyses and (2) a situation in which all states are subject to the same type of standard. We show that while the cross-subsidy inherent in the performance- based standard might effectively reduce power prices, it could also inflate energy consumption. A dominant firm with a relatively clean endowment under the performance-based standard would be able to manipulate the electricity market as well as to elevate permit prices, which might worsen market outcomes compared to its mass-based counterpart. On the other hand, the "cross-subsidy" could be the dominant force leading to a higher social welfare if the leader has a relatively dirty endowment. [ABSTRACT FROM AUTHOR]

We calculate the cost of a carbon dioxide constraint in the production of electricity by modeling the replacement of coal generators with natural gas generators. We find: First, replacing coal generators with natural gas generators is the most economical way to reduce carbon dioxide emissions by 20 percent. Second, replacing existing coal generation capacity with modern coal generation plants can only reduce total carbon dioxide by 5 percent. Third, the distribution of the efficiency of coal generators in the United States restricts the range over which carbon dioxide prices effectively manage the displacement of coal by gas. Fourth, the narrow range for the price of carbon dioxide creates the possibility that a market in carbon dioxide permits will result in high volatility in the market for electricity. Fifth, the carbon prices implied by the transition from coal to gas will have very little impact on transportation fuels. [ABSTRACT FROM AUTHOR]

Economic analyses of climate change policies frequently focus on reductions of energy-related carbon dioxide emissions via market-based, economy-wide policies. The current course of environment and energy policy debate in the United States, however, suggests an alternative outcome: sector-based and/or inefficiently designed policies. This paper uses a collection of specialized, sector-based models in conjunction with a computable general equilibrium model of the economy to examine and compare these policies at an aggregate level. We examine the relative cost of different policies designed to achieve the same quantity of emission reductions. We find that excluding a limited number of sectors from an economy-wide policy does not significantly raise costs. Focusing policy solely on the electricity and transportation sectors doubles costs, however, and using non-market policies can raise cost by a factor often. These results are driven in part by, and are sensitive to, our modeling of pre-existing tax distortions. [ABSTRACT FROM AUTHOR]

The multi-sector end-use energy model E3MC was used to analyze the energy and greenhouse gas emissions impact of adding a carbon tax to efficiency improvement standards for the residential sector in Canada and the USA. Compared to standards alone, the addition of the tax led to further residential emission reductions in Canada, but attenuated the residential emission reductions in the USA. Examination of the relative residential electricity:natural gas prices demonstrated that the different country impacts were due to an increase in relative prices in the USA, but a decrease in relative prices in Canada that led to opposite shifts in preference for electricity over natural gas in the residential sector. Markedly different impacts of the carbon tax on electricity prices was due to the predominance of hydroelectric power in Canada and coal-fired electric generation in the USA. [ABSTRACT FROM AUTHOR]

This paper is stimulated by the debate in the US about optimal abatement paths, in particular recent claims that it would be economicallypreferable to defer such abatement action, in favour of measures that support technology development but do not affect emission trends for many years. This paper categorises the various economic issues involved and concludes that for each economic argument that has been advanced to justify deferring emission constraints, there are countervailing economic arguments that could be used in support of rapid near-term emissions abatement. Rational policy lies between these extremes. A policy of deferring all emissions abatement exposes economic systems and industries, as well as the environment, to significantly greater costs and risks than those arising from a more balanced approach. Furthermore the modelling studies that have been used to justify deferring emissions abatement do so because they embody the economic factors favourable to delay and largely neglect the countervailing issues,to the point where they cannot be considered as relevant to a balanced assessment of the issues relating to economically optimal abatement timing. [ABSTRACT FROM AUTHOR]

We describe carbon dioxide mitigation scenarios specified by the Energy Modeling Forum study (EMF-24) "U.S. Technology Transitions under Alternative Climate Policies," using a global computable general equilibrium model that simulates world energy and agricultural systems through 2050. One set of scenarios covers variation across five major technology groups: end-use technology, carbon dioxide capture and storage, nuclear electricity generation, wind and solar power, and bioenergy. Other scenarios cover variation across policies. Policies such as a renewable portfolio standard for electricity generation or a clean electricity standard have the potential for significant emissions reductions, but at a greater cost than a cap-and-trade scenario with the same reduction in emissions. Cap-andtrade scenarios resulted in carbon dioxide leakage rates of 11 to 20 percent depending on the stringency of the targets. Oil-exporting regions without a mitigation policy may still have significant welfare losses when other world regions reduce emissions. [ABSTRACT FROM AUTHOR]

Standards, subsidies, and carbon taxes are among the measures often considered to reduce energy consumption and carbon dioxide (CO2) emissions in the buildings sector. Using a modeling system developed by the U.S. Energy Information Administration, residential and commercial sector standards and subsidies were each modeled with and without a carbon tax to determine if a multi-policy approach would be redundant. A separate case examining a carbon tax was also completed for comparison. Between the two equipment-based policies, subsidies achieved more energy and CO2 emissions reductions at less cost to consumers, as incremental investment costs were shifted to the government. When either of the equipment-based policies was combined with a carbon tax, their energy- and carbon-reducing effects were more additive than redundant. [ABSTRACT FROM AUTHOR]

In management of carbon dioxide concentrations in the atmosphere, the authors argue that it is far superior to control upstream where the carbon leaves the ground in a limited number of places than further downstream as carbon dioxide is released in a myriad of locations. The authors note that none of the proposals being discussed politically assure this, and they control sector by sector, allowing undesirable room for special interests to be excluded from control. [ABSTRACT FROM AUTHOR]

Aggregate energy intensity in the United States has been declining steadily since the mid-1970s and the first oil shock. Energy intensity can be reduced by improving efficiency in the use of energy or by moving away from energy-intensive activities. At the national level, I show that roughly three-quarters of the improvements in U.S. energy intensity since 1970 results from efficiency improvements. This should reduce concerns that the United States is off-shoring its carbon emissions. A state-level analysis shows that rising per capita income and higher energy prices have played an important part in lowering energy intensity. Price and income predominantly influence intensity through changes in energy efficiency rather than through changes in economic activity. In addition, the empirical analysis suggests that little policy intervention will be needed to achieve the Bush Administration goal of an 18 percent reduction in carbon intensity by the end of this decade. [ABSTRACT FROM AUTHOR]

This article explores historic carbon dioxide (CO2) emission trends from road and air transportation of the United States and 26 developing and industrializing nations. It is argued that environmental trends in the newest industrializing countries do not follow the more sequential and long-term shifts experienced by the United States. The empirical analysis demonstrates that all rapidly developing countries analyzed exhibit comparable transportation CO2 emissions per capita levels at lower levels of income per capita, or sooner, than the United States. For some developing countries (the most rapidly growing), these emissions also grow faster over time. Last, there is clear evidence that emissions from road and air sources are occurring more simultaneously compared to the United States. This pattern of changes is in contrast with the common interpretation of environmental Kuznets curves, which suggest that countries follow similar patterns of environmental impacts over time as they develop economically. [ABSTRACT FROM AUTHOR]

Incorporates behavioral parameters derived from end-use equipment acquisition surveys in a bottom-up simulation model of the residential sector in the United States, in order to probe the basis for different cost estimate concerning carbon dioxide emission. Why society should pursue fuel switching policies for the goal of reducing CO2 emissions in residential areas.