Interactions of Transportation Carbon Pricing with the Electricity Market in the TCI Region

Dallas Burtraw and Maya Domeshek
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Dallas Burtraw: Resources for the Future
Maya Domeshek: Resources for the Future

No 20-04, RFF Issue Briefs from Resources for the Future

Abstract: A modest carbon price in TCI can be expected to have nearly unobservable effects on the electricity sector because the change in electricity demand will remain a small portion of total electricity demand. Companion policies that involve use of carbon pricing revenues will yield additional increases in electricity demand from the transportation sector.In contrast, the electricity sector could influence outcomes in the transportation sector importantly through electricity rate reform and strategic infrastructure investments for greater electric vehicle adoption.If carbon pricing in transportation and electricity were linked the overall cost effectiveness of carbon pricing in the region would be improved but it would yield substantially less revenue for investments in transportation.

Date: 2020-03-12
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Persistent link: https://EconPapers.repec.org/RePEc:rff:ibrief:ib-20-04

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