Abstract: Several different economic models have been applied to try to understand how new regulations by the U.S. Environmental Protection Agency (EPA) could impact coal-fired generation in the United States as well as the electricity system as a whole. This paper provides an overview of many of the key studies and the models used to analyze the potential impacts of EPA’s rules. The regulations surveyed include the Cross-State Air Pollution Rule (CSAPR), the Mercury and Air Toxics Standards (MATS), the proposed Clean Water Act (CWA) Section 316(b) rule, and the proposed Coal Combustion Residuals (CCR) rule. The models generally agree that these regulations will result in coal plant retirements, though there is far less agreement on how much generation may retire. Assumptions about the price of natural gas and the expected stringency of regulations play a key role in determining modeling results. The models provide useful guidance for policymakers when considering the potential impact of EPA regulation.

Abstract: While the U.S. Environmental Protection Agency (EPA) is in the process of regulating greenhouse gas (GHG) emissions under its Clean Air Act (CAA) authority, Congress has considered several different bills that would preempt CAA regulation of GHGs and replace it with a comprehensive national climate policy. Policymakers should be aware that there are other existing federal statutes granting GHG regulatory authority, and new legislation would likely preempt them as well. This paper surveys these other statutes in order to highlight existing federal authority that might be given up with the passage of a new comprehensive bill. It explores the possibility of direct regulation of GHGs under the Clean Water Act (CWA), along with federal authority to block projects that contribute to climate change under the National Environmental Policy Act (NEPA) and conservation statutes such as the Endangered Species Act (ESA). Newer statutes like the Energy Independence and Security Act (EISA) mandate narrower regulation, but they are also considered here.

Abstract: Natural ecosystems provide a variety of benefits to society, known as “ecosystem services.” Fundamental to the provision of ecosystem services in a region is its underlying biodiversity, i.e., the wealth and variety of plants, animals, and microorganisms. Because the benefits from ecosystem services and biodiversity are not valued in market exchanges, private landowners tend to undersupply them. We compare and contrast the different approaches taken to providing ecosystem services on private land in three federal programs—the Endangered Species Act, the Conservation Reserve Program, and Section 404 of the Clean Water Act. The Endangered Species Act (ESA) places restrictions on land uses for private landowners if endangered species, or critical habitats for endangered species, are found on their properties. The Conservation Reserve Program (CRP) compensates farmers for removing valuable property from agricultural production to preserve wildlife habitat, water and soil quality, and other ecosystem values. Section 404 of the Clean Water Act prohibits destruction or damage to wetlands, unless individuals buy credits for equivalent wetlands created by third parties—so-called “wetlands mitigation banks.” These three policies run the gamut from a command-and-control regulatory approach to a “payment for ecosystem services” option. We summarize the economics literature on key findings from these programs.

Abstract: Concerns about nutrient pollution in the Chesapeake Bay have led to the establishment of pollution limits—total maximum daily loads (TMDLs)—which, by 2025, are expected to reduce nitrogen loadings to the Bay by 25 percent and phosphorous loadings by 24 percent from current levels. This paper outlines how the benefits associated with achieving the Chesapeake Bay TMDLs could be measured and monetized. We summarize studies that measure the benefits of improved water quality in the Bay and evaluate whether these studies could be used to value the water quality benefits associated with the TMDLs.In cases where studies conducted in the Bay watershed either do not exist or are out of date, we discuss whether results from studies conducted elsewhere could be transferred to the Chesapeake Bay. We also discuss original studies that would be useful to conduct in the future.

Abstract: In this paper we review the evolution of the wetlands credit sales program developed to support the federal wetlands permit program. Then, we explain how the regulatory rules governing the overall permit program, as well as specific rules governing credit sales, have prevented the development of robust markets in credit buying and selling. Based on this review, we identify an alternative institutional structure that would apply marketlike principles to expand the quantity of and lower the prices of credits while ensuring that wetlands credit sales help move the nation toward its goal: no net loss of wetlands acres and functions.