Cost-Effectiveness and Economic Incidence of a Clean Energy Standard

Matthew Mowers, Daniel Steinberg, Bryan Mignone, Thomas Alfstad, Aaron Bergman, Kenneth Dubin, Richard Duke, Paul Friley, Andrew Martinez, Karen Palmer, Anthony Paul, Sharon Showalter, Matt Woerman, Frances Wood

Research output: Contribution to journalArticlepeer-review

16 Scopus Citations


A Clean Energy Standard (CES) is a flexible, market-based policy instrument that could be adopted to reduce greenhouse gas emissions from the U.S. electricity system over time. This paper uses several well-known energy system and electricity models to analyze a CES that reflects broad principles outlined in President Obama's January 2011 State of the Union Address and in the Administration's subsequent Blueprint for a Secure Energy Future.1 In particular, it examines three different design options for a CES that would each lead to approximately 80% clean electricity by 2035. These different design options provide broadly similar economic incentives for clean energy deployment and yield similar overall welfare impacts, but they exhibit different distributional outcomes. The most inclusive CES crediting approach favors producers over consumers in competitive electricity markets as well as regions with larger initial endowments of clean energy. On the other hand, the most restrictive crediting approach favors consumers over producers and reduces preferences for regions with larger initial endowments of clean energy. While specific technology outcomes vary across the four models used in this study, key insights about cost-effectiveness and economic incidence are largely robust to theunderlying modeling platform. These insights may be important considerations in future CES policy design efforts.

Original languageAmerican English
Pages (from-to)59-86
Number of pages28
JournalEconomics of Energy and Environmental Policy
Issue number3
StatePublished - 2012

Bibliographical note

Publisher Copyright:
Copyright © 2012 by the IAEE. All rights reserved.

NREL Publication Number

  • NREL/JA-6A20-68395


  • clean energy standard
  • electricity modeling
  • energy modeling
  • greenhouse gas mitigation
  • market-based environmental policy


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