Economic and environmental impacts of a carbon adder in New York

Arbeitspapier

New York is considering additional emission regulation on top of its obligations under the Regional Greenhouse Gas Initiative (RGGI) to achieve its State Energy Plan targets. The proposed measure is a so-called "carbon adder" on CO2 emissions from the power sector which is set as the difference between the targeted social cost of carbon and the prevailing RGGI price for CO2 emission allowances. We investigate the potential economic and environmental impacts from the imposition of a carbon adder on New York's power sector. While our analysis indicates the risk of excess cost through overlapping regulations, we find that the carbon adder gives the "right" price signal for New York's power generation to turn into a greener one. Market requirements for permit price floors in the RGGI market induces carbon permit retirements across RGGI states leading to small reductions in region- and country-wide emissions levels.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Oldenburg Discussion Papers in Economics ; No. V-424-19

Classification and Topics

• Classification: Wirtschaft ; Allocative Efficiency; Cost-Benefit Analysis ; Taxation and Subsidies: Efficiency; Optimal Taxation ; Taxation and Subsidies: Incidence ; Environmental Economics: Government Policy
• Subject: environmental regulation ; overlapping regulation ; emission taxes ; emissions trading

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Akın-Olçum, Gökçe ; Böhringer, Christoph ; Rutherford, Thomas F. ; Schreiber, Andrew
• Event: Veröffentlichung
• (who): University of Oldenburg, Department of Economics
• (where): Oldenburg
• (when): 2019

Further information

• Handle: http://hdl.handle.net/10419/203449
• Last update: 10.03.2025, 11:41 AM CET