Undergraduate Honors Theses

Thesis Defended

Spring 2012

Document Type

Thesis

Department

Economics

First Advisor

Dr. Jonathan Hughes

Abstract

The Clean Energy Standard Act of 2012 (CESA-12) was introduced to reduce carbon dioxide (CO2) emissions and promote the use of renewable energy in the electricity sector. The legislation contains two separate policy mechanisms to achieve its goals: a generation requirement that specified technology distributions, and a carbon emission intensity requirement. The carbon intensity aspect of the bill is a novel approach for addressing carbon emissions produced from electricity generation, though similar schemes have already been implemented in the transportation sector. This paper finds that the bill acts as a Renewable Portfolio Standard (RPS) for the first ten years of its life, and then acts as a hybrid RPS-carbon intensity standard for the remainder, based on current generation distribution projections. When the carbon intensity requirements are isolated using historical data, CESA-12 generally reduces carbon emissions, though does so at the cost of simultaneously reducing social welfare.

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