06/10/2013 - 12:00pm - 1:00pm
“Emission standards with trading:
Evidence from Alberta's GHG regulation”
Dr. Deepak Rajagopal is assistant professor at the UCLA Institute of the Environment in Los Angeles. His special research interests include energy markets and policy, environmental economics and policy, and lifecycle assessment for policy design, as well as biofuels, renewable energy systems, and economics of food and agriculture. His major focus is on the challenges and implications of biofuels. The mission of the Institute of the Environment is to generate knowledge and provide solutions for regional and global environmental problems and to educate the next generation of professional leadership committed to the health of our planet. Dr. Deepak Rajagopal has an inter-disciplinary background having received his PhD in Energy and Resources (UC Berkeley) and Master of Science degrees in Mechanical Engineering (Indian Institute Technology, Madras) and also in Agricultural and Resource Economics (UC Berkeley).
Emission intensity standards (EIS) represent a third alternative to policies that target emissions directly, say, emission fees or tradable emission permits and policies that target emissions indirectly by promoting renewable energy, say, renewable energy mandates and subsidies. Emerging economies such as China and India appear agreeable to EIS(s) to meet international commitments to reducing GHG emissions and such an approach is being considered for the electricity sector in the US. A prominent example of an EIS is the California Low Carbon Fuel Standard, which mandates reduction in greenhouse gas (GHG) intensity of transportation fuels consumed in California. An advantage of an EIS relative to a renewable energy policy is that it encourages substitution from more pollution-intensive fuels to less pollution intensive fuels and not force substitution from fossil fuels to renewable fuels. When there exist multiple renewable energy substitutes with differing pollution intensity, an emission standard will lead to adoption of the more cost-effective renewable fuels. Although policies such as emission fees or tradable emission permits that target emissions directly are the cost-effective approach to reducing pollution, they have been shown to lead to less output, higher prices and less employment relative to an emission standard. Emissions may however increase under an EIS. In this presentation, I will present preliminary results from an ex post assessment of Alberta's Specified Gas Emitters Regulation (SGER) which is one of the first multi-sector GHG emission intensity regulation.