Chen, Y;
Tanaka, M;
Siddiqui, A;
(2019)
A Leader-Follower Model for Tradable Performance-Based CO2 Emissions Standards.
In:
(pp. pp. 941-946).
IEEE: Miyazaki, Japan.
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Abstract
The U.S. Clean Power Plan stipulates a state-specific performance-based CO2 emission standard and delegates considerable flexibility to the states for using either a tradable performance-based or a mass-based permit program. This paper analyzes these two instruments when they are subject to imperfect competition. We show that while the cross-subsidy inherent in the performance-based instrument might effectively reduce power prices, it could also inflate energy demand, thereby rendering permits scarce. A dominant firm with a relatively clean endowment under the performance-based policy would be able to manipulate the electricity market as well as to lower permit prices, which might worsen market outcomes compared to its mass-based counterpart. On the other hand, the 'cross-subsidy' could be the dominant force leading to a higher social welfare if the leader has a relatively dirty endowment.
Type: | Proceedings paper |
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Title: | A Leader-Follower Model for Tradable Performance-Based CO2 Emissions Standards |
ISBN-13: | 9781538666500 |
Open access status: | An open access version is available from UCL Discovery |
DOI: | 10.1109/SMC.2018.00167 |
Publisher version: | https://doi.org/10.1109/SMC.2018.00167 |
Language: | English |
Additional information: | This version is the author accepted manuscript. For information on re-use, please refer to the publisher’s terms and conditions. |
Keywords: | Oligopoly , ISO , Production , Linear programming , Instruments , Force |
UCL classification: | UCL UCL > Provost and Vice Provost Offices > UCL BEAMS UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of Maths and Physical Sciences UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of Maths and Physical Sciences > Dept of Statistical Science |
URI: | https://discovery.ucl.ac.uk/id/eprint/10070416 |
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