Reports & Papers

Can supply-side environmental policies that limit the extraction of fossil fuels reduce CO2 emissions? We study interactions between a specific supply-side policy — an environmental charge on federal coal — and demand-side emissions regulation under the Clean Power Plan (CPP). Using a detailed dynamic model of the power sector, we estimate that, absent the CPP, an environmental charge equal to the social cost of carbon would generate three-quarters of the projected CPP emissions reductions. With the CPP in place, the charge reduces emissions by reducing leakage and causing the CPP to be non-binding in some scenarios.

U.S. states would implement the federal Clean Power Plan using a variety of policies that could either undermine or support the operation of electricity markets.

Global environmental goals and trade goals can be reconciled.   Globalization and multilateral institutions can facilitate environmental protection rather than obstruct it, if they are harnessed in the right way.  Perhaps most urgent is that negotiators working on a sequel to the Kyoto Protocol agree on guidelines to govern precisely how individual countries can and cannot use trade measures in pursuit of carbon mitigation.