Full Title: The Future of Cap-and-Trade Program in California: Will Low GHG Prices Last Forever?
Author(s): Yingxia Yang, Michael Hagerty, Ashley Palmarozzo, Metin Celebi, Marc Chupka, Hannah Sheffield
Publisher(s): Brattle Group
Publication Date: December 1, 2017
Full Text: Download Resource
Description (excerpt):
In summary, while California has started down its path to reducing GHG emissions by putting a comprehensive policy framework in place for decarbonizing its economy, significant uncertainties lie ahead for California’s Cap-and-Trade Program and the future outlook of its GHG prices. As the GHG price is a critical input to the dispatch decisions and generator profit margins in the electric sector, system planners have to make long-term strategic decisions based on expectations of the market and policies. The multi-sector model we have developed presents an analytical tool that helps to understand these dynamics in the GHG market, examine the impacts of key underlying drivers of GHG prices, and facilitate decision making with a focus on the electric sector. Other states and regions contemplating a major decarbonization should consider the way that complementary policies, GHG prices, and customer adoption of clean-energy technologies will interact using the California experience as a starting point for developing their own programs.