Evaluating Emissions Reductions through the Regional Greenhouse Gas Initiative: A State and Plant-Level Analysis
by Nicholas Vassilios Papavassiliou
Abstract
In this study, I examine the impact of the Regional Greenhouse Gas Initiative (RGGI) on emission reductions in the electricity sector, focusing on three critical dimensions. First, I analyze temporal trends in emissions reductions to evaluate whether previously demonstrated progress has slowed as states exhaust low-cost mitigation pathways. Second, I assess regional impacts within electricity grid management areas, particularly the Pennsylvania-Jersey-Maryland Interconnection Regional Transmission Organization (PJM ISO) where participating and non participating states coexist, including investigating emissions leakage where reductions in RGGI states are offset by increases in neighboring non-RGGI states. Third, I extend the analysis to other greenhouse gases and co-pollutants. Employing difference indifferences and synthetic control methods, the findings show that the RGGI has a significant on the intensive margin, significantly reducing operating hours and heat input across all types of power plants. Alongside these reductions, RGGI spurs net facility exits and promotes fuel switching toward lower-carbon sources. As a result, both pollutant intensity and aggregate emissions decline over time, underscoring the program’s effectiveness. Examining these shifts in the context of regional electricity grids indicates that comprehensive coverage across interconnected markets can minimize leakage and better achieve environmental objectives, offering insights for the design of future regional climate policies.
Professor Jeffrey DeSimone, Faculty Advisor
Professor Michelle Connolly, Faculty Advisor
JEL Codes: Q41, Q48, Q52, Q58
Keywords: Cap-and-Trade, Emissions Leakage, Environmental Policy, Regional Greenhouse
Gas Initiative
Email for Access to Data
The True Cost: An Aggregate Analysis of the Advanced Clean Cars II Policy
by Lauren Mackenzie Sizemore
Abstract
Global climate change, emphasis on the global, requires local solutions. Every entity plays a role, some more than others. Yet, when improvements in pollution or emissions in one region leads to more problems in another, how is the net cost or benefit to be deciphered for the environment, for the economy, and for humanity in general? Advanced Clean Cars II (ACC II), a proposed policy in California, United States, is a practical test of this question. For each model year beginning in 2026, the potential law gives a percentage of new vehicle sales that must be zero-emission vehicles (ZEVs) – cars that do not emit exhaust gas or other pollutants from the onboard source of power – or plug-in-hybrid electric vehicles (PHEVs). By 2035, ACC II would require all new vehicles purchased in California to be either a ZEV or a PHEV. With reduced tailpipe emissions, California expects to benefit from reduced smog, less carbon emissions, better air quality, a reduction in air-related health issues such as asthma, and increased sales from California-based electric vehicle companies such as Tesla and Rivian. Since air is a common resource, improving California’s quality also betters air globally. Yet emissions and pollution produced during the mining, production, and scrappage phases work in opposition to the decreased tailpipe emissions. By converting each type of pollutant into a per vehicle dollar cost, I paint a better picture of the global cost-benefit. The per vehicle cost is scaled based on the expected number of electric and conventional vehicles in California which is predicted under two scenarios: ACC II passes with full enforcement and the law is not passed. I forecast the number of electric vehicles likely bought in both instances using the Bass Model for New Product Growth of Consumer Durables (Bass 1969). I determine that a maximum of eighteen states, including California, could successfully implement ACC II and lower emissions given their 2021 electricity grid’s carbon intensity.
Professor Connel Fullenkamp, Faculty Advisor
Professor Michelle Connolly, Faculty Advisor
JEL Codes: Q5, Q51, Q58
Responses to EU Carbon Pricing: The Effect of Carbon Emissions Allowances on Renewable Energy Development in Advanced and Transitional EU Members
By John Dearing
Using electricity price, generation, installed capacity, and carbon price data from the European Union from January 2015 to December 2018, this study finds that the carbon pricing in the European Union Emissions Trading Scheme (EU ETS) incentivizes electricity sector carbon emission reductions through renewable energy deployment only for economically advanced EU members. Transitional economies show a weak to modest carbon emission increase despite a common carbon price. This study estimates an electricity supply curve, or merit order, for 24 EU ETS members using a Tobit regression model and analyzes changes in this curve using a linear bspline. These shifts provide insight into how carbon pricing affected energy generation, price, and CO2 emissions for two distinct categories of EU member states. The advanced category as a whole saw a strong electricity sector decrease in carbon emissions, both over time and from carbon pricing, while the transitional category as a whole saw a weak increase. This indicates that advanced EU members in Northern, Western, and Central Europe likely sold permits to transitional ones in Southern and Eastern Europe. While these findings may initially reflect the gains from trade of carbon emissions, permits inherent in the European Union Emissions Trading Scheme’s design, the implications of how these two distinct groups have changed electricity generation present challenges to the ultimate long-term goal of EU-wide carbon neutrality by 2050, particularly in transitional economies’ electricity sectors.
View Data (Email for Access)
Advisors: Professor Lincoln Pratson, Professor Christopher Timmins | JEL Codes: Q4, Q43, Q48, Q5, Q52, Q56, Q58
The Effect of Federal Regulations on the Outcomes of Auctions for Oil and Gas Leaseholds
By Artur Shikhaleev
This thesis attempts to analyze the impact of the differences in regulatory frameworks that govern state-owned and federally-owned lands on the outcomes of auctions for oil and natural gas leaseholds in the state of New Mexico. The analysis tries to isolate the effect of ownership by controlling for auction structure, leasehold characteristics, and prices of underlying resources. Given past research, the hypothesis is that stricter regulations carry a heavier cost to buyers, so the expectation is that federally-owned leaseholds, which are more regulated, are traded at a discount to state-owned leaseholds. However, the result of this thesis is contradictory to the hypothesis. The conclusion is that stricter regulations do not lead to a discounted auction price for an oil and gas leasehold.
Advisor: James Roberts, Kent Kimbrough | JEL Codes: C12, C21, Q35, Q58 | Tagged: Auction, Education, environment, federal, natural gas, Oil, Regulation, State
Race and Pollution Correlation as Predictor of Environmental Injustice
By Marissa Meir
Environmental injustice is a theory that claims distributions of toxic, hazardous and dangerous waste facilities are disproportionately located in low-income communities of color. This paper empirically demonstrates an alternative cause of environmental injustice- that low-income minorities are less likely to receive sizeable enough loans to buy a house in a cleaner area. It highlights a significant time in history, from 1999 to 2007, when wealth constraints were eased and loan amounts increased for people with the same income. The results show that minorities increase their demand of environmental goods given an increase in loan amounts, suggesting that people of color care about environmental quality, but, due to wealth constraints, do not have the same opportunities
in the housing market.
Advisor: Christopher Timmins | JEL Codes: P46, P48, Q50, Q53, Q56, Q58, R20, R21, R31, R32 | Tagged: Air Quality, Environmental Injustice, Housing Market, Income, Loan, Wealth Constraints
After the Storm Impacts of natural disasters in the United States at the state and county level
By Danjie Fang
Empirical research on the impact of natural disasters on economic growth has provided contradictory results and few studies have focused on the United States. In this thesis, I bridge the gap by examining the merits of existing claims on the relationship between natural disasters and growth at the states and county level in the U.S. I find that climatological and geophysical disasters have a small and negative impact on growth rates at the state level, but that this impact disappears over time. At the county level, I find that tornados have a slight but negative impact on per capita GDP levels and growth rates over a five year period across three states that experience this natural phenomenon. Controlling for FEMA aid, I find that there may be upward omitted variable bias in regressions that do not include the amount of aid as a variable. I find evidence that FEMA aid has a small but positive impact on growth and per capita GDP levels at both the county and state level.
Advisor: Christopher Timmins, Michelle Connolly | JEL Codes: O11, O40, Q58 | Tagged: Aid, County, FEMA, Natural Disasters, State, United States
