| ID | 116923 |
| Title Proper | Impact of transmission constraints on the emissions leakage under cap-and-trade program |
| Language | ENG |
| Author | Sauma, Enzo |
| Publication | 2012. |
| Summary / Abstract (Note) | Several regional cap-and-trade (C&T) programs are considered or implemented in the United States to control greenhouse gas emissions from the power sector. One concern is the possibility of emissions leakage due to a lack of coherence in the geographic scope of the regional electricity market and the C&T program. Leakage in the context of regulating CO2 emissions is defined as the short-run displacement of CO2 emissions from the capped region to other uncapped regions due to the imposition of a regional C&T scheme. However, the presence of transmission congestion could interact with regulations in an unanticipated way to determining whether leakage would occur and its magnitude if happens. In this paper, we use a two-node network to study the conditions under which the CO2 leakage would happen in a radial network under a C&T program. These conditions are related to transmission capacity, merit order change, and relative production cost between capped and uncapped regions. Since CO2 leakage would likely occur in a radial network during the time when there is surplus transmission capacity, if regional CO2 policies could influence power grid management and operations decisions, then there might be space for a better multi-objective coordination. |
| `In' analytical Note | Energy Policy Vol. 51; Dec 2012: p.164-171 |
| Journal Source | Energy Policy Vol. 51; Dec 2012: p.164-171 |
| Key Words | Carbon Leakage ; Emissions Trading ; Power System Economics |