Greenhouse Gases Resulting from Grid-Connected Electricity Demand: Three Pillars and Scope Two

Karl Dunkle Werner and Arik Levinson ()

No 33546, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Many governments and businesses would like to minimize or eliminate the greenhouse gases that result from their purchases of power from electricity grids. Because electricity flows cannot be traced from purchasers back to specific generators, some regulators and users have proposed an approximation. Purchasers would be credited with using clean power if they contract for electricity generated by particular zero-carbon suppliers to the grid or purchase certificates accompanying that zero-carbon generation, so long as those arrangements meet three conditions, or “pillars”: The associated clean power must be generated (1) nearby, (2) during the same hour, and (3) from newly constructed power plants. Whether or not the three pillars are followed, existing or planned electricity generation meeting all three conditions is expected to account for 10 percent of US power in 2030. We show that the qualifying power would be cleaner than average, but not zero-carbon. Electricity purchases meeting the restrictions will have incremental emissions per megawatt hour 30 to 43 percent below unrestricted average emissions per megawatt hour. The three pillars could have additional climate benefits if demand for clean power exceeds the restricted supply, resulting in less total electricity demand or encouraging construction of new clean electricity capacity.

JEL-codes: Q42 Q47 Q48 Q58 (search for similar items in EconPapers)
Date: 2025-03
Note: EEE
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Working Paper: Greenhouse Gases Resulting from Grid-Connected Electricity Demand: Three Pillars and Scope Two (2025)
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