The main opposition to climate and clean energy policy in the United States comes in two forms - energy prices and jobs.
The Obama Administration proposed a goal of obtaining 80 percent of electricity from clean energy sources by 2035 using a Clean Energy Standard (CES). A CES uses tradable credits to encourage the use of non and low CO2 emitting generation technologies to produce electricity. The details of how such a system is expected to operate are yet to be determined but the broad brush proposal calls for full credits to be given to renewables and incremental nuclear generation, half credits to natural gas combined cycle generators and generators equipped with carbon capture and storage (CCS).
RFF Senior Fellow and Center for Climate and Electricity Policy (CCEP) Associate Director Karen Palmer joint with CCEP Center Fellow Anthony Paul and Research Assistant Matt Woerman, researched the effects a CES would have on one of the debated issues - electricity prices. Palmer and colleagues found that a CES, which would lower CO2 emissions from electricity over the next 25 years by 30 percent, would increase electricity prices by a national average of 8 percent by 2035. As the maps below show, some competitive regions would see a decrease in electricity prices in 2035 while other regions, most of which are regulated, would experience higher prices. The final map shows that Eastern states would buy credit from generators in western states under a CES.
Read more about RFF's CES research here.
