Air quality co-benefits and costs under state, regional, or national cooperation to regulate CO2 from existing power plants

Abstract:

We examine the effect of state, regional, and national cooperation on the costs and air quality co-benefits of a policy to limit the carbon intensity of existing electricity generation. Electricity generation is a significant source of both greenhouse gases and air pollutant emissions that harm human health. Previous studies have shown that air quality co-benefits can be substantial compared to the costs of limiting carbon emissions in the energy system. The EPA’s proposed Clean Power Plan seeks to impose carbon intensity limits for each state, but allows states to cooperate in order to meet combined limits. We explore how such cooperation might produce trade-offs between lower costs, widespread pollution reductions, and local reductions. We employ a new state-level model of the US energy system and economy to examine the costs and emissions as states reduce demand or deploy cleaner generation. We use an advanced air quality impacts modeling system, including SMOKE, CAMx, and BenMAP, to estimate health-related air quality co-benefits and compare these to costs under different levels of cooperation. We draw conclusions about the potential impacts of cooperation on economic welfare at various scales.