Technology Flexibility and Stringency for Greenhouse Gas Regulations

Dallas Burtraw and Matt Woerman

RFF Working Paper Series from Resources for the Future

Abstract: The Clean Air Act provides the primary regulatory framework for climate policy in the United States. Tradable performance standards (averaging) emerge as the likely tool to achieve flexibility in the regulation of existing stationary sources. This paper examines the relationship between flexibility and stringency. The metric to compare the stringency of policies is ambiguous. The relevant section of the act is traditionally technology based, suggesting an emissions rate focus. However, a specific emissions rate improvement averaged over a larger set of generators reduces the actual emissions change. A marginal abatement cost criterion to compare policy designs suggests cost-effectiveness across sources. This criterion can quadruple the emissions reductions that are achieved, with net social benefits exceeding $25 billion in 2020, with a 1.3 percent electricity price increase. Under the act, multiple stringency criteria are relevant. EPA should evaluate state implementation plans according to a portfolio of attributes, including effectiveness and cost.

Keywords: climate policy; efficiency; EPA; Clean Air Act; coal; compliance flexibility; regulation (search for similar items in EconPapers)
JEL-codes: K32 Q54 Q58 (search for similar items in EconPapers)
Date: 2013-07-23
New Economics Papers: this item is included in nep-ene, nep-env, nep-law and nep-res
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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