State Policy Options to Price Carbon from Electricity - Dallas Burtraw, Karen Palmer, Anthony Paul, and Paul Picciano

The final product and any errors are the sole responsibility of the authors, and the findings and observations expressed in this report do not necessarily reflect the views of any of the foundations, Ms. [...] In the late 1990s, the patchwork introduction of competition to the electricity sector in roughly one-third of the country, including the states in the RGGI region, changed this dynamic. [...] The allocation of emissions allowances (i.e., the use of auction proceeds) in the nine states already in RGGI is assumed to continue in the future as described in Hibbard et al. [...] The linked program continues to be on the price floor with a very slight increase in the allowances issued in North Carolina and a slight increase in allowance value, but virtually no change in emissions in the state and little leakage. [...] The RTS leads to an increase in renewable generation compared with the similar scenario without an RTS (column 2) and a slight decrease in natural gas generation in the state, but it also leads to a reduction in electricity consumption because the cost of service and the price seen by customers increase to pay for the RTS.