Structure of the Dynamic Integrated Economy/Energy/Emissions Model: Computable General Equilbrium Component, DIEM-CGE
This paper, a companion to NI WP 14-11, describes the structure of, and data sources for, the macroeconomic component of the Dynamic Integrated Economy/Energy/Emissions Model (DIEM), which was developed at the Nicholas Institute for Environmental Policy Solutions at Duke University. The DIEM model includes a macroeconomic, or computable general equilibrium (CGE), component and an electricity component that gives a detailed representation of U.S. regional electricity markets, DIEM-Electricity. The DIEM-CGE component can be run as a stand-alone model to look at both global and U.S. domestic policies related to the economy, energy, or greenhouse gas emissions. Alternatively, DIEM-CGE can be linked to DIEM-Electricity to investigate the macroeconomic impacts of policies affecting electricity generation. This paper describes DIEM-CGE’s model structure, data sources, representations of production technologies, and possible linkages to DIEM-Electricity. It provides an overview of the model and details of the equilibrium structure underlying the model. It presents the production equations and discusses the model’s data and forecast sources. It also presents information on the model’s greenhouse gas emissions and abatement options as well as details of the linkage between DIEM-CGE and DIEM-Electricity.
Regulating Existing Power Plants under the Clean Air Act: Present and Future Consequences of Key Design Choices
In June 2014, the EPA released its proposal for rules to regulate carbon dioxide emissions from existing fossil fuel power plants, triggering considerable debate on the proposal’s environmental and economic consequences and on alternatives highlighted by the proposal and by other stakeholders. One question not addressed by this debate is this: What if the EPA regulations turn out to be inadequate to address future mitigation goals? That is, what will the landscape for future policies look like if these regulations turn out to be just an interim measure? This analysis explores the long-term consequences of several key regulatory design choices, including mass-based versus rate-based standards, tradable versus non-tradable standards, and differentiated versus single standards. It finds that these consequences may be significant: differentiated standards lead to relatively greater investment in coal retrofits; non-tradable standards lead to relatively greater retirement of coal capacity. It may be the case that key policy choices entail one set of tradeoffs if proposed EPA rules are viewed as relatively permanent and final and another set of tradeoffs if the rules are viewed as an interim solution.
Duke University has developed the OptimaBIOGAS tool to model the opportunities for and costs of developing, transporting, and generating usable energy from a variety of biogas sources. In this analysis, the tool is used to clarify the options for and costs of sourcing biogas from landfills within North Carolina. The study found that biogas production is possible throughout many existing landfills in the state, but the economic viability of producing biogas at these locations depends on the cost of collecting and conditioning the gas and either using it to produce electric power onsite or transporting it into the existing natural gas pipeline network. In most cases, both the pipeline injection and electricity generation scenario are more costly than conventional sources in the gas and electricity markets; therefore some price premium would need to be paid to make them profitable. The state’s Renewable Energy and Efficiency Portfolio Standard might offer renewable energy credit payments to help these projects compete. However, biogas buyers may need to pay an additional “green energy” price premium to cover the higher costs of generation.
The Lieberman-Warner America's Climate Security Act: A Preliminary Assessment of Potential Economic Impacts
On August 2, 2007 Senator Lieberman and John Warner (R-VA) introduced a framework for Lieberman-Warner America's Climate Security Act of 2007. The proposal, which we refer to here as the "Lieberman-Warner" bill, calls for the United States to make substantial cuts in greenhouse gas emissions below current levels by 2050. Such greenhouse gas emissions cuts will contribute to global efforts aimed at reducing atmospheric concentrations of greenhouse gases and mitigating harm to our climate system. The most recent assessment report of the Intergovernmental Panel on Climate Change provides a scientific basis for th world's countries to take strong action to mitigate the threats of climate change.
A Path to Greenhouse Gas Reductions in the United States: Economic Modeling of Interim National Targets
This study employs a computable general equilibrium model of the U.S. integrated into the global economy (ADAGE) and a detailed model of the U.S. energy sector (NI-NEMS) to examine the broad and deep economic implications of interim-term greenhouse gas cap-and-trade programs across sectors and regions of the U.S. economy over time. Interim target scenarios hold U.S. emissions to either 1990 or 2005 levels in the year 2020. These 2020 emission targes are in the range of those now being considered by the U.S. Congress, though several of the Congressional proposals call for continued cuts beyond 2020. This study therefore provides abounding assessment of the initial pathway to greenhouse gas reductions, one which can provide a first order assessment of "economic harm" and provides a platform for guaging implications of longer term cuts should they be applied. Results suggest rather modest macroeconomic impacts on the U.S. economy of greenhouse gas targets considered, though impacts tend to be concentrated, as expected, in the more energy intensive sectors.
Economic consequences of consideration of permanence, leakage and additionality for soil carbon sequestration projects
This paper introduces, explains and describes the methods for addressing the issues of permanence, leakage and additionality (PLA) of agricultural soil carbon sequestration (ASCS) activities at the project level. Further, it evaluates methords for identifying and estimating PLA and guages the potential magnitude of these effects on the economic returns to a project.