On the Feasibility, Costs, and Benefits of an Immediate Phasedown of Coal for US Electricity Generation

Stephen P. Holland, Matthew J. Kotchen, Erin T. Mansur and Andrew J. Yates

Journal of the Association of Environmental and Resource Economists, 2026, vol. 13, issue 1, 77 - 114

Abstract: In this study, we examine the feasibility of immediately phasing down US coal-generated electricity given the existing fleet of power plants. We take consumption as given and evaluate how prioritizing natural gas generation over that of coal would change emissions and operating costs. To do this, we develop a replacement algorithm based on transmission regions and marginal cost comparisons. We find that between 66% and 94% of coal generation could be replaced immediately, reducing electricity sector CO2 emissions between 18% and 29%—equivalent to between 5% and 8% of total US energy-related emissions. The cost range is between $49 and $92 per ton of CO2, where benefit-cost ratios are favorable in some scenarios considering local pollutant cobenefits alone. Despite the command-and-control nature of prioritizing natural gas generation, we find it relatively cost-effective even in comparison to a Pigouvian tax.

Date: 2026
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