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Cutting Carbon, Take Two: A Brief Guide to Federal Electricity‐Sector Climate Policy without Cap‐and‐Trade
Author(s) -
Linn Joshua,
Richardson Nathan
Publication year - 2013
Publication title -
applied economic perspectives and policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.4
H-Index - 49
eISSN - 2040-5804
pISSN - 2040-5790
DOI - 10.1093/aepp/ppt019
Subject(s) - subsidy , incentive , electricity , investment (military) , emissions trading , climate policy , economics , clean technology , production (economics) , energy policy , clean air act , economic policy , electricity generation , business , climate change mitigation , natural resource economics , public economics , greenhouse gas , renewable energy , power (physics) , market economy , air pollution , microeconomics , political science , ecology , chemistry , physics , organic chemistry , quantum mechanics , politics , law , electrical engineering , biology , engineering
This paper explores federal policies, other than a carbon price, for reducing emissions from the electric power sector. These policies fall into two major categories: policies that encourage the development of non‐ or low‐emitting energy sources, and regulatory policies under existing legal authority (primarily the Clean Air Act). The paper provides an overview of policy options and a few concrete proposals, along with a summary of insights from economists on their advantages and disadvantages. Economists generally disfavor investment subsidies, but comparing other policy options, including regulatory approaches, technology mandates, and production subsidies, is complex. Excluding existing clean generation from incentive policies is tempting but can lead to perverse outcomes.