New Issue Brief: State Policy Options to Price Carbon from Electricity in Pennsylvania

RFF Releases Issue Brief Following Pennsylvania RGGI Announcement


Oct. 3, 2019

News Type

Press Release

Resources for the Future (RFF) is today releasing the first of two issue briefs analyzing the impacts of pricing carbon in Pennsylvania. The issue brief’s release follows this morning’s news that Governor Tom Wolf has signed an executive order that puts Pennsylvania on a path to joining the Regional Greenhouse Gas Initiative (RGGI).

The issue brief, “State Policy Options to Price Carbon from Electricity in Pennsylvania,” outlines key emissions and cost projections for the state of Pennsylvania under a RGGI framework. It examines a variety of policy scenarios, and finds the following:

  • Emissions reductions under the RGGI architecture can be achieved at very low cost. Changes in retail electricity prices are projected to be less than one-half of 1 percent in 2026 relative to business as usual.
  • Cumulative reductions of about 209 million tons relative to 2020 emissions could be achieved by 2030, equating to cumulative reductions of about 387 million tons relative to the projected baseline.
  • Adopting the RGGI program design makes linking the Pennsylvania program to the existing RGGI program straightforward. When the two programs are linked, emissions reductions in the combined region are accelerated.

The issue brief is based on modeling by Dallas Burtraw, Karen Palmer, Anthony Paul, and Paul Picciano, using RFF’s Haiku electricity market model. The researchers examined a dozen policy scenarios. The findings outlined in the issue brief are based on an earlier RFF fact sheet and their May 2019 report, State Policy Options to Price Carbon from Electricity. A second issue brief, with additional analysis exploring market design issues in greater detail, will be released later this month.

This independent analysis is part of the RGGI Project Series and was supported by the Barr Foundation, Energy Foundation, Merck Family Fund, Environmental Trust, The Betterment Fund, Devonshire Foundation, Daniel Hildreth, and New York Community Trust, and by RFF’s Energy and Climate Program, and coordinated by Laurie Burt, LLC.

Resources for the Future (RFF) is an independent, nonprofit research institution in Washington, DC. Its mission is to improve environmental, energy, and natural resource decisions through impartial economic research and policy engagement. RFF is committed to being the most widely trusted source of research insights and policy solutions leading to a healthy environment and a thriving economy.

Unless otherwise stated, the views expressed here are those of the individual authors and may differ from those of other RFF experts, its officers, or its directors. RFF does not take positions on specific legislative proposals.

For more information, please see our media resources page or contact Media Relations and Communications Specialist Annie McDarris.

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