State and Regional Comprehensive Carbon Pricing and Greenhouse Gas Regulation in the Power Sector Under EPA's Clean Power Plan: Workshop Summary

Abstract

The Clean Power Plan (CPP) is the centerpiece of the US efforts to reduce carbon emissions, introducing regulation of greenhouse gas emissions from existing power plants for the first time on a national basis. These regulations may interact with existing initiatives, for example, in California, where the state has a comprehensive economy-wide cap with emissions allowance trading in place. In addition, three Pacific coast states and British Columbia have supported the idea of comprehensive pricing. This paper provides a summary of a workshop that examined the interaction of these policy approaches. A main observation in the workshop was that the forthcoming CPP will likely facilitate and complicate the prospect of comprehensive carbon pricing. Multistate coordination in complying with the CPP could be key to making simultaneous progress on both the national and regional policy efforts and could provide a pathway from regulation to carbon pricing.

Keywords: Clean Air Act, Clean Power Plan, carbon pricing, cap and trade, regulation, emissions rates

JEL Classification: Q28, Q48, Q58