“Adjustment on the Margin: Evaluating Emissions Reduction Policies in the Face of Short-Run Adjustment Costs”
James Archsmith (University of California, Davis)
Policies to reduce the emissions impact of from electricity generation frequently target the quantity of energy produced but ignore emissions resulting from generators responding to changes in demand. I estimate the impact of policies that alter the generation or demand for electricity on polluting emissions, paying special attention to the impact on the rate and frequency with with fossil fuel plants are required to adjust output (ramp) to meet demand. Failing to account for the impacts of ramping overstate the emissions benefits of new solar PV and vastly understate the benefits of electricity storage technology. These results suggest policies targeting pollution reductions from electricity generation should account for the level and pattern of changes in supply and demand.
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