Incorporating global warming risks in power sector planning: A case study of the New England region. Volume 1.

摘要

Growing international concern over the threat of global climate change has led to proposals to buy insurance against this threat by reducing emissions of carbon (short for carbon dioxide) and other greenhouse gases below current levels. Concern over these and other, non-climatic environmental effects of electricity generation has led a number of states to adopt or explore new mechanisms for incorporating environmental externalities in utility resource planning. For example, the New York and Massachusetts utility commissions have adopted monetized surcharges (or adders) to induce emission reductions of federally regulated air pollutants (notably, SO(sub 2), NO(sub x), and particulates) beyond federally mandated levels. These regulations also include preliminary estimates of the cost of reducing carbon emissions, for which no federal regulations exist at this time. Within New England, regulators and utilities have also held several workshops and meetings to discuss alternative methods of incorporating externalities as well as the feasibility of regional approaches. This study examines the potential for reduced carbon emissions in the New England power sector as well as the cost and rate impacts of two policy approaches: environmental externality surcharges and a target- based approach. We analyze the following questions: Does New England have sufficient low-carbon resources to achieve significant reductions (10% to 20% below current levels) in fossil carbon emissions in its utility sector. What reductions could be achieved at a maximum. What is the expected cost of carbon reductions as a function of the reduction goal. How would carbon reduction strategies affect electricity rates. How effective are environmental externality cost surcharges as an instrument in bringing about carbon reductions. To what extent could the minimization of total electricity costs alone result in carbon reductions relative to conventional resource plans.