Browsing by Subject "Cap and trade"

Now showing 1 - 3 of 3

Anticipating the impacts of climate policies on the U.S. light-duty-vehicle fleet, greenhouse gas emissions, and household welfare
(2011-05) Paul, Binny Mathew; Kockelman, Kara; Greene, David L.
The first part of this thesis relies on stated and revealed preference survey results across a sample of U.S. households to first ascertain vehicle acquisition, disposal, and use patterns, and then simulate these for a synthetic population over time. Results include predictions of future U.S. household-fleet composition, use, and greenhouse gas (GHG) emissions under nine different scenarios, including variations in fuel and plug-in-electric-vehicle (PHEV) prices, new-vehicle feebate policies, and land-use-density settings. The adoption and widespread use of plug-in vehicles will depend on thoughtful marketing, competitive pricing, government incentives, reliable driving-range reports, and adequate charging infrastructure. This work highlights the impacts of various directions consumers may head with such vehicles. For example, twenty-five-year simulations at gas prices at $7 per gallon resulted in the highest market share predictions (16.30%) for PHEVs, HEVs, and Smart Cars (combined) — and the greatest GHG-emissions reductions. Predictions under the two feebate policy scenarios suggest shifts toward fuel-efficient vehicles, but with vehicle miles traveled (VMT) rising slightly (by 0.96% and 1.42%), thanks to lower driving costs. The stricter of the two feebate policies – coupled with gasoline at $5 per gallon – resulted in the highest market share (16.37%) for PHEVs, HEVs, and Smart Cars, but not as much GHG emissions reduction as the $7 gas price scenario. Total VMT values under the two feebate scenarios and low-PHEV-pricing scenarios were higher than those under the trend scenario (by 0.56%, 0.96%, and 1.42%, respectively), but only the low-PHEV-pricing scenario delivered higher overall GHG emission estimates (just 0.23% more than trend) in year 2035. The high-density scenario (where job and household densities were quadrupled) resulted in the lowest total vehicle ownership levels, along with below-trend VMT and emissions rates. Finally, the scenario involving a $7,500 rebate on all PHEVs still predicted lower PHEV market share than the $7 gas price scenario (i.e., 2.85% rather than 3.78%). The second part of this thesis relies on data from the U.S. Consumer Expenditure Survey (CEX) to estimate the welfare impacts of carbon taxes and household-level capping of emissions (with carbon-credit trading allowed). A translog utility framework was calibrated and then used to anticipate household expenditures across nine consumer goods categories, including vehicle usage and vehicle expenses. An input-output model was used to estimate the impact of carbon pricing on goods prices, and a vehicle choice model determined vehicle type preferences, along with each household’s effective travel costs. Behaviors were predicted under two carbon tax scenarios ($50 per ton and $100 per ton of CO2-equivalents) and four cap-and-trade scenarios (10-ton and 15-ton cap per person per year with trading allowed at $50 per ton and $100 per ton carbon price). Results suggest that low-income households respond the most under a $100-per-ton tax but increase GHG emissions under cap-and-trade scenarios, thanks to increased income via sale of their carbon credits. High-income households respond the most across all the scenarios under a 10-ton cap (per household member, per year) and trading at $100 per ton scenario. Highest overall emission reduction (47.2%) was estimated to be under $100 per ton carbon tax. High welfare loss was predicted for all households (to the order of 20% of household income) under both the policies. Results suggest that a carbon tax will be regressive (in terms of taxes paid per dollar of expenditure), but a tax-revenue redistribution can be used to offset this regressivity. In the absence of substitution opportunities (within each of the nine expenditure categories), these results represent highly conservative (worst-case) results, but they illuminate the behavioral response trends while providing a rigorous framework for future work.
Assessing the effectiveness of the EU ETS through the oil and gas sector
(2019-07-09) Reid, Mark William; King, Carey Wayne, 1974-
Following the initiation of the European Union Emissions Trading Scheme (EU ETS) in 2005 the scheme has received significant criticism pertaining to a lack of transparency in its operational mechanics and an inability to present conclusive evidence that it has encouraged a reduction in monitored emissions. This study utilizes an adaptation of the event study methodology proposed by Ball and Brown (1968) and Fama et al. (1969) in order to assess the impact of the EU ETS on emissions in the European oil and gas sector as a sample reflective of the scheme on the whole. In doing so, this study compares the annual emissions of carbon dioxide, nitrous oxide and methane for dual listed, single listing and cross listed oil and gas companies on the New York Stock Exchange and the London Stock Exchange and how these emissions change over the period 2000-2017; from prior to the EU ETS until the period of most recent data availability. Analysis conducted on the data gathered infers that, while the EU ETS may have exerted some influence on operators’ behavior, the scheme has generally been ineffective in achieving its goal of lowering emissions and encouraging economic growth. This study also explores the limitations of the EU ETS and potential drivers of emissions changes for operators within the scheme. Through such discussion the intention is to better understand the tradeoff between the advantages of cap-and-trade, a quantity mechanism, and emissions taxation, a pricing mechanism. These mechanisms comprise the majority of the presently adopted emissions policies globally, including the EU ETS, and China’s and Canada’s emissions trading schemes. Therefore, in better understanding the implications and effects of these mechanisms, the intention is to contribute to the future adoption and implementation of global emissions policies.
Carbon pricing, politics and the Clean Power Plan
(2016-05) Draper, Maia Penelope; Olmstead, Sheila M.; Busby, Joshua
This paper examines the role that emissions trading among states can play in implementing the Clean Power Plan in the U.S., reviewing the structure and performance of existing carbon markets as examples for how a multistate carbon market might be implemented. Additionally, given the politically contentious environment surrounding the Clean Power Plan, the paper reviews the arguments of states opposing the Clean Power Plan and analyzes to what extent this opposition is driven by ideologically motivated political factors as opposed to economic factors. Overall, I find that while both political and economic factors drive opposition to the Clean Power Plan, ideologically motivated political factors seem to play a stronger role in states’ attitudes. With regard to cost-effective implementation of the Clean Power Plan, a review of the literature suggests that thoroughly incorporating market-driven carbon pricing mechanisms and facilitating coordination among states will be crucial in determining the rule’s overall effectiveness.