Allowance Allocation in a CO2 Emissions Cap-and-Trade Program for the Electricity Sector in California

Karen Palmer, Dallas Burtraw and Anthony Paul ()
Additional contact information
Anthony Paul: Resources for the Future

RFF Working Paper Series from Resources for the Future

Abstract: The regulation of greenhouse gas emissions from the electricity sector within a cap-and-trade system poses significant policy questions about how to allocate tradable emission allowances. Allocation conveys tremendous value and can have efficiency consequences. This research uses simulation modeling for the electricity sector to examine different approaches to allocation under a cap-and-trade program in California. The decision affects prices and other aspects of the electricity sector, as well as implications for the overall cost of climate policy. An important issue is the opportunity for emission reductions in California to be offset by emission increases in neighboring regions that supply electricity to the state. The amount of emission leakage (i.e. an increase in CO2 emissions outside of California as a result of the program) varies with the regulatory design of the program.

Keywords: cap-and-trade; electricity generation; electricity sector; emissions; regulation; governance; allocation; California (search for similar items in EconPapers)
JEL-codes: L94 Q2 Q25 Q4 (search for similar items in EconPapers)
Date: 2009-10-07
New Economics Papers: this item is included in nep-cmp, nep-ene, nep-env and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://www.rff.org/RFF/documents/RFF-DP-09-41.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.rff.org/RFF/documents/RFF-DP-09-41.pdf [301 Moved Permanently]--> https://www.rff.org/RFF/documents/RFF-DP-09-41.pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rff:dpaper:dp-09-41

Access Statistics for this paper

More papers in RFF Working Paper Series from Resources for the Future Contact information at EDIRC.
Bibliographic data for series maintained by Resources for the Future ().