Optimal Carbon Taxes for Emissions Targets in the Electricity Sector
By Daniel Julius Olsen, Yury Dvorkin, Ricardo Fernández-Blanco, Miguel Ortega-Vazquez. IEEE Transactions on Power Systems, 2018
81 citations recorded by the source corpus.
The most dangerous effects of anthropogenic climate change can be mitigated by using emissions taxes or other regulatory interventions to reduce greenhouse gas (GHG) emissions. This paper takes a regulatory viewpoint and describes the Weighted Sum Bisection method to determine the lowest emission tax rate that can reduce the anticipated emissions of the power sector below a prescribed, regulatorily-defined target. This bilevel method accounts for a variety of operating conditions via stochastic programming and remains computationally tractable for realistically large planning test systems, even when binary commitment decisions and multiperiod constraints on conventional generators are considered. Case studies on a modified ISO New England test system demonstrate that this method reliably finds the minimum tax rate that meets emissions targets. In addition, it investigates the relationship between system investments and the tax-setting process. Introducing GHG emissions taxes increases the value proposition for investment in new cleaner generation, transmission, and energy efficiency; conversely, investing in these technologies reduces the tax rate required to reach a given emissions target.
Subfields: Economics and Econometrics, Electrical and Electronic Engineering, Renewable Energy, Sustainability and the Environment
View Paper: https://www.semanticscholar.org/paper/d4f43ed503cc5e456710392bc563d01d56dc7d09
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Citations in the corpus
- Carbon-Oriented Operational Planning in Coupled Electricity and Emission Trading Markets (2020, background): “Carbon emission cost per unit of energy consumption is added as carbon price in [4].”
- Low-Carbon Operation of Multiple Energy Systems Based on Energy-Carbon Integrated Prices (2020, background): “The carbon emission cost per MWh of energy consumption can be internalized as a part of the energy price based on the carbon tax, which is simpler and easier to implement than a cap-and-trade policy [19].”