The welfare cost and greenhouse gas emissions effects of sector-specific energy policies
type: CreativeWork
description: At present climate and energy policy in the US consists of a patchwork of technology and performance standards implemented in different economic sectors and at different levels of government, rather than a more efficient economy-wide carbon tax or cap-and-trade policy. This is evidenced by policies such as state-level Renewable Portfolio Standards (RPSs), national Renewable Fuel Standard (RFS), and the recently finalized EPA rule for power plants: the Clean Power Plan (CPP). These sector-specific policies when implemented jointly can interact with each other in ways that are synergistic or competitive and affect the mix of renewable energy, fossil fuels and prices in the electricity, transportation and agricultural sectors. The purpose of this research is to examine the effect of these overlapping policies on greenhouse gas reduction and welfare costs for the electricity, transportation, and agricultural sectors relative to levels that would have been achieved by each of these policies individually. Joint implementation of the RFS and the RPSs can increase the cost of bio-electricity and biofuels by competing for biomass and shift the mix and spatial pattern of production of renewable fuels used for compliance; on the other hand, renewable electricity generated as a co-product of the cellulosic ethanol refining process could lower the cost of complying with the RPSs but not add significantly to the greenhouse gas reductions achieved by the RPS. Similarly, implementing the CPP and the RPSs together could result in more renewable and low carbon electricity and greenhouse gas reduction than with either policy alone but at higher welfare costs than with either policy alone or with a cross-sector carbon tax. This research seeks to disentangle the complex and multi-sectoral spillover effects of these policies by developing an integrated, dynamic, open economy model of the US electricity, transportation and agricultural sectors. It contributes to the literature that has fo…
abstract: At present climate and energy policy in the US consists of a patchwork of technology and performance standards implemented in different economic sectors and at different levels of government, rather than a more efficient economy-wide carbon tax or cap-and-trade policy. This is evidenced by policies such as state-level Renewable Portfolio Standards (RPSs), national Renewable Fuel Standard (RFS), and the recently finalized EPA rule for power plants: the Clean Power Plan (CPP). These sector-specific policies when implemented jointly can interact with each other in ways that are synergistic or competitive and affect the mix of renewable energy, fossil fuels and prices in the electricity, transportation and agricultural sectors. The purpose of this research is to examine the effect of these overlapping policies on greenhouse gas reduction and welfare costs for the electricity, transportation, and agricultural sectors relative to levels that would have been achieved by each of these policies individually. Joint implementation of the RFS and the RPSs can increase the cost of bio-electricity and biofuels by competing for biomass and shift the mix and spatial pattern of production of renewable fuels used for compliance; on the other hand, renewable electricity generated as a co-product of the cellulosic ethanol refining process could lower the cost of complying with the RPSs but not add significantly to the greenhouse gas reductions achieved by the RPS. Similarly, implementing the CPP and the RPSs together could result in more renewable and low carbon electricity and greenhouse gas reduction than with either policy alone but at higher welfare costs than with either policy alone or with a cross-sector carbon tax. This research seeks to disentangle the complex and multi-sectoral spillover effects of these policies by developing an integrated, dynamic, open economy model of the US electricity, transportation and agricultural sectors. It contributes to the literature that has fo…
author: Oliver, Anthony Charles
language: en
keywords: Renewable Portfolio Standard, Clean Power Plan, Welfare cost, Greenhouse gas emissions, Price-endogenous sector model, Dynamic optimization, Spatial analysis, Bioenergy
date published: 2016-03-02T19:34:03Z
date modified: 2026-07-22T22:26:32Z
provider: University of Illinois - Urbana-Champaign
publisher: Networked Digital Library of Theses and Dissertations
type: WebPage
source organization: University of Illinois at Urbana-Champaign

PropertyValue
property ID: Handle
value: http://hdl.handle.net/2142/89024