“Why are Marginal CO2 Emissions Increasing for U.S. Electricity? Estimates and Implications for Climate Policy”
Stephen Holland (University of North Carolina at Greensboro), Matthew Kotchen (Yale University), Erin Mansur (Dartmouth College), and Andrew Yates (University of North Carolina at Chapel Hill)
This paper makes two fundamental contributions at the intersection between electricity generation and climate policy. The first is estimates of marginal CO2 emissions from electricity generation in the United States using the most recently available and comprehensive dataset. The estimates vary by region, hour of the day, and year-to-year over the last decade. The second contribution is a novel and rather counterintuitive finding: marginal emissions have been increasing over the last decade (7% nationally), despite a decrease in average emissions (28% nationally). We show that underlying the divergence are two explanations. First is a shift toward greater reliance on coal to satisfy marginal electricity use, and second is a decrease in utilization rates that lower the efficiency of coal-fired units. These findings have important implications for the CO2 emissions of policies that seek to address climate change through shifts in electricity demand and the use of renewable sources of energy to displace fossil-fuel generation.