Benefits and Costs of Power Plant Carbon Emissions Pricing in New York

Daniel Shawhan, Paul Picciano and Karen Palmer
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Daniel Shawhan: Resources for the Future
Paul Picciano: Resources for the Future
Karen Palmer: Resources for the Future

No 19-08, RFF Reports from Resources for the Future

Abstract: Emissions pricing, such as a carbon adder or new NY cap-and-trade program, could be used to help meet the ambitious NY clean power goals. It could also prevent a large federal penalty on non-emitting NY generation.We simulate a carbon dioxide emissions price on NY power plants that reaches $51 per ton in 2025 (2013 dollars). It reduces their emissions by between 6% and 22% in 2025, relative to business as usual.The estimated cost to NY electricity users is between 0.1% and 1.1% of the retail electricity rate.Surprisingly, the emissions price reduces emissions in neighboring states too by increasing NY’s renewable generation enough to reduce the state’s net power imports.The net benefit to society would be between $108 million and $651 million per year as of 2025.Outcomes depend significantly on the cost of building solar and wind arrays in the non-urban parts of NY state.

Date: 2019-07-23
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Persistent link: https://EconPapers.repec.org/RePEc:rff:report:rp-19-08

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