Prioritizing Justice in New York State Cap-Trade-and-Invest - Alan Krupnick, Molly Robertson, Wesley Look, Eddie Bautista, and Eunice Ko

For the full trading case (FTC) relative to the BAU and for the restricted trading case (RTC) relative to the BAU and the FTC, we estimated changes in energy demand and technology adoption, energy prices, emissions changes in modeled sectors, and the location of emissions changes in the power sector, with a particular focus on direct PM and NO. [...] We find that adding facility-specific caps in the power sector (included in the RTC) changes the distribution of emissions across generators and therefore the location of pollutant emissions in the state. [...] When allowing sectors to trade and find the least-cost reductions, as in the FTC, we see a 2 percent decrease in GHG emissions in the transportation sector, a 46 percent decrease in the residential sector, and a 48 percent decrease in the power sector, relative to the BAU. [...] The sector-specific caps in the RTC lead to 0.2 percent higher GHG emissions in the transportation sector (relative to the FTC) and about 8 percent higher CO e emissions in the power sector to 2 save on costs due to the lower CO e permit price required to meet the sector specific 2 cap. [...] At the same time, the lower gas prices in the RTC would mean that the average low-income drivers would save approximately $18 16 The electricity prices in the RTC reflect the combined impacts of the lower carbon price in the sector and the facility-specific caps.