Fusing Electricity and Carbon Markets in the American West Can Organized Electricity Markets Bolster Cap-and- Trade
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Keywords

electricity
carbon markets
cap and trade
regional cap and trade programs
climate policy

How to Cite

Caulkins, L. (2022). Fusing Electricity and Carbon Markets in the American West Can Organized Electricity Markets Bolster Cap-and- Trade. Columbia Journal of Environmental Law, 47(2). https://doi.org/10.52214/cjel.v47i2.9872

Abstract

Efforts to “link” together several state or provincial GHG cap-and- trade programs to form a regional cap-and-trade initiative in western North America began in the early 2000s but never realized their aims. Now, emerging organized electricity markets in western states, includ- ing the Energy Imbalance Market, offer the possibility of integrating these markets with a regional cap-and-trade program to cut emissions at a low cost. This Note explains how a regional cap-and-trade program could be incorporated into the West’s nascent organized electricity mar- kets. It then argues that doing so could cost-effectively reduce power sector emissions, guide clean energy development, and alleviate incon- sistencies between varying state climate regulations. However, because of a phenomenon called “resource shuffling,” these benefits would not materialize unless all or most western states participate in the cap-and- trade program. To realize the climate benefits of integrating organized markets with cap-and-trade, climate-concerned advocates and policy- makers should therefore continue to aspire to a national cap-and-trade program or a regional program that attracts broad participation.

https://doi.org/10.52214/cjel.v47i2.9872
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Copyright (c) 2022 Luther Caulkins