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INDIRECT EMISSIONS (2) answer(s).
 
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ID:   136195


Emissions trading scheme design for power industries facing price regulation / Kim, Yong-Gun; Lim, Jong-Soo   Article
Kim, Yong-Gun Article
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Summary/Abstract The electricity market, monopolistic in nature, with government price regulation, poses a serious challenge for policy makers with respect to the cost-effectiveness of emissions trading, particularly in Asian countries. This paper argues that a cap-and-trade regulatory system for indirect emissions combined with a rate-based allocation system for direct emissions can achieve market efficiency even in the presence of price and quantity controls in the electricity market. This particular policy mix could provide appropriate incentives for industries to reduce their electricity consumption while inducing power producers to reduce their direct carbon emissions cost-effectively in conditions where there is strict government control of electricity prices. Another advantage of the suggested policy mix is that it allows carbon leakage in cross-border power trades to be effectively eliminated.
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2
ID:   150723


Leveling the playing field of transportation fuels: accounting for indirect emissions of natural gas / Sexton, Steven; Eyer, Jonathan   Journal Article
Sexton, Steven Journal Article
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Summary/Abstract Natural gas transportation fuels are credited in prior studies with greenhouse gas emissions savings relative to petroleum-based fuels and relative to the total emissions of biofuels. These analyses, however, overlook a source of potentially large indirect emissions from natural gas transportation fuels, namely the emissions from incremental coal-fired generation caused by price-induced substitutions away from natural-gas-fired electricity generation. Because coal-fired generation emits substantially more greenhouse gases and criteria air pollutants than natural-gas-fired generation, this indirect coal-use change effect diminishes potential emissions savings from natural gas transportation fuels. Estimates from a parameterized multi-market model suggest the indirect coal-use change effect rivals in magnitude the indirect land-use change effect of biofuels and renders natural gas fuels as carbon intensive as petroleum fuels.
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