Regional Cooperation under the Clean Power Plan Incentives For Trading Under Rate vs. Mass Compliance

摘要

1. Conventional wisdom says trading CO_2 allowances/credits lowers costs of meeting a cap and increases welfare 2. This is based on the assumption of a conventional cap and trade market where all sources are covered 3. The Clean Power Plan is different 3.1 Mass based compliance excludes new NGCCs from the cap 3.2 Rate based trading changes the incentives to build/generate versus a mass based cap 4. Does conventional wisdom still apply? And if so, what state groupings can realize the greatest efficiencies from trade? Will trading cause leakage?