| ID | 094302 |
| Title Proper | Environmentally damaging electricity trade |
| Language | ENG |
| Author | Villemeur, Etienne Billette de ; Pineau, Pierre-Olivier |
| Publication | 2010. |
| Summary / Abstract (Note) | Electricity trade across regions is often considered welfare enhancing. We show in this paper that this should be reconsidered if environmental externalities are taken into account. We consider two cases where trade is beneficial, before accounting for environmental damages: first, when two regions with the same technology display some demand heterogeneity; second when one region endowed with hydropower arbitrages with its "thermal" neighbor. Our results show that under reasonable demand and supply elasticities, trade comes with an additional environmental cost. This calls for integrating environmental externalities into market reforms when redesigning the electricity sector. Two North American applications illustrate our results: trade between Pennsylvania and New York, and trade between hydro-rich Quebec and New York. |
| `In' analytical Note | Energy Policy Vol. 38, No. 3; Mar 2010: p.1548-1558 |
| Journal Source | Energy Policy Vol. 38, No. 3; Mar 2010: p.1548-1558 |
| Key Words | Electricity Trade ; Hydropower ; Greenhouse Gas Emissions |