Full Title: The Affordable Clean Energy Rule and the Impact of Emissions Rebound on Carbon Dioxide and Criteria Air Pollutant Emissions
Author(s): Amelia T. Keyes, Kathleen F. Lambert, Dallas Burtraw, Jonathan J. Buonocore, Jonathan I. Levy, and Charles T. Driscoll
Publisher(s): IOP Science
Publication Date: 01/2019

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Description (excerpt):

The Affordable Clean Energy (ACE) rule, the U.S. Environmental Protection Agency’s (EPA) proposed
replacement of the Clean Power Plan (CPP), targets heat rate improvements at individual coal plants in
the U.S. Due to greater plant efficiency, such heat rate improvements could lead to increased generation
and emissions, known as an emissions rebound effect. The EPA Regulatory Impact Analysis (RIA) for ACE
and other analyses to date have not quantified the magnitude and extent of an emissions rebound. We
analyze the estimated emissions rebound of carbon dioxide (CO2) and criteria pollutants sulfur dioxide
(SO2) and nitrogen oxides (NOX), using results from the EPA’s power sector model, under the ACE in 2030
at model coal plants and at the state and national levels compared to both no policy and the CPP. We
decompose emissions changes under a central illustrative ACE scenario and find evidence of a state-level
rebound effect. Although the ACE reduces the emissions intensity of coal plants, it is expected to
increase the number of operating coal plants and amount of coal-fired electricity generation, with 28
percent of model plants showing higher CO2 emissions in 2030 compared to no policy. As a result, the
ACE only modestly reduces national power sector CO2 emissions and increases CO2 emissions by up to
8.7 percent in eighteen states plus the District of Columbia in 2030 compared to no policy. We also find
that the ACE increases SO2 and NOX emissions in nineteen states and twenty states plus DC, respectively,
in 2030 compared to no policy, with implications for air quality and public health. We compare our
findings to other model years, additional EPA ACE scenarios, and other modeling results for similar
policies, finding similar outcomes. Our results demonstrate the importance of considering the emissions
rebound effect and its effect on sub-national emissions outcomes in evaluating the ACE and similar policies
targeting heat rate improvements.