Full Title: Policy Options for Reducing Carbon Emissions
Author(s): Aayush Nema
Publisher(s): Scioto Analysis
Publication Date: May 30, 2021
Full Text: Download Resource
Description (excerpt):
This study is an analysis of state-level policy options for abating carbon emissions from the energy
sector. We consider three types of policies — Renewable Portfolio Standards (RPS), cap-and-trade,
and carbon tax — and compare the efficacy of each in reducing the economic impact of carbon
emissions over a thirty-year period. While we project a strong cap and trade policy to be marginally
more effective than alternatives, renewable portfolio standards, cap and trade, and carbon tax policies all have the potential to drastically reduce state carbon emissions. Even a conservative policy mirroring the status quo in Michigan — a renewable portfolio standard of 25% from 2026 onwards — substantially reduces the projected social cost of carbon emissions through 2050.
Our study uses the U.S Energy Information Administration’s data on energy production in Ohio between 2008-2018, which includes the distribution of energy among different sources. Based on energy production trends and the current Renewable Portfolio Standards (RPS), we project state energy production trends and the amount of CO2 emitted each year from 2021 to 2050. After discounting the status quo policy projected costs of carbon emissions and the relative reduction in costs with a new policy implementation, we determine a cap of 127.4 million metric tons in 2021, decreasing by 2.275 million metric tons each year, to be the most effective carbon abatement policy for Ohio when measured in the social benefits of carbon abatement.