Analysis of Policy Options for Carbon Standard

On August 2015, the U.S. Environmental Protection Agency (EPA) finalized the first-ever carbon emission standard for existing U.S. power plants, the Clean Power Plan. The Clean Power Plan, provided demand-side incentives to the States which promote energy efficiency and the use of renewables and natural gas to reduce carbon dioxide emissions from the power sector. The Clean Power Plan was to be the centerpiece of U.S. efforts in the global treaty of carbon dioxide emissions the Paris Climate Agreement. The Trump Administration plans an alternate approach to carbon emission management which focuses on improvement of the heat rate efficiency of individual electrical generating units. We have compared the air quality and human health and ecosystem benefits of an incentives-based policy like the Clean Power Plan with a heat rate improvement approach. We have started a follow-up study comparing the air quality, health and ecosystem benefits of the Clean Power Plan with a policy option which would accelerate carbon dioxide emission controls and with a suite of policies that roll back power plant carbon dioxide emissions.

Figure 3. Comparison of carbon emission policy rollbacks to the Clean Power Plan (G4f) and to a second policy option that accelerates the Clean Power Plan by cutting power plant emissions by another 50% (G5a). The four rollback policies include (1) the application of the Clean Power Plan only to existing sources (PC06); (2) no Clean Power Plan for any sources (G1); (3) no Clean Power Plan and high gas prices (G1c); and (4) no Clean Power Plan, no tax credits for renewable energy, and no increase in demand-side energy efficiency (RC01).