Researchers Analyze Economic Effects of EPA’s Carbon Emission Guidelines
By Tara Moore / 412-268-9673 / tararaemoore [a] cmu (p) edu Researchers in Carnegie Mellon University's College of Engineering demonstrate in a recent paper that states may not have the incentive to cooperate in reducing carbon emissions from electric power plants, even though such cooperation would lower costs nationwide. In their study of the Environmental Protection Agency's (EPA's) recently proposed carbon pollution emissions guidelines for electric power plants, the researchers also examined the distribution of compliance costs between producers and consumers, the effects of compliance on electricity prices, and the changes in net revenues for coal and natural gas power plants under a compliance scenario. The paper explores the EPA's "111(d) rule,” which the agency recently proposed using its authority under the Clean Air Act, and which would lead to a 30 percent reduction in electric power sector carbon emissions below 2005 levels by 2030. The rule provides states with options for achieving emissions reduction goals, allowing them to act individually or to cooperate, and also allowing the choice of a rate-based standard or a mass-based standard. "A rate-based standard basically limits the average emissions rate of affected electricity generating units (EGUs), while a mass-based standard limits the mass of CO2 emitted by affected EGUs,” said David Luke Oates, the lead author on the paper who recently completed his Ph.D. in engineering and public policy (EPP) at Carnegie Mellon.
