 The price-emissions nexus in U.S. residential electricity marketsMaryam Feyzollahi and Nima Rafizadeh Resource and Energy Economics, 2025, vol. 83, issue C Abstract: This study quantifies the impact of residential electricity prices on greenhouse gas (GHG) emissions, addressing a critical gap in climate policy analysis. Using panel data from 48 contiguous U.S. states (1990–2017), we develop a novel decomposition framework for the residential electricity price elasticity of GHG emissions (REPE-GHG) and employ two-step GMM estimation to address price endogeneity and dynamic consumption adjustments. Our results reveal a short-run residential electricity price elasticity of GHG emissions of −0.6% and a long-run elasticity of −5.2%. We find substantial regional heterogeneity, with elasticities in the Midwest and South significantly exceeding those in the Northeast. Moreover, the REPE-GHG exhibits a marked downward trend over time, accelerating post-2005. These findings suggest that uniform national pricing policies may be suboptimal and that price-based interventions become less effective as energy systems evolve. Keywords: Greenhouse gas emissions; Electricity pricing; Price elasticity; Climate policy (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:resene:v:83:y:2025:i:c:s0928765525000375 DOI: 10.1016/j.reseneeco.2025.101513 Access Statistics for this article Resource and Energy Economics is currently edited by J. F. Shogren and S. Smulders More articles in Resource and Energy Economics from Elsevier |
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