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Economics of Carbon Dioxide Sequestration versus a Suite of Alternative Renewable Energy Sources for Electricity Generation in U.S., California and Illinois

Author

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  • Ramesh Agarwal

    (Department of Mechanical Engineering and Materials Science Washington University in St. Louis, St. Louis, USA.)

  • Zheming Zhang

    (Department of Mechanical Engineering and Materials Science Washington University in St. Louis, St. Louis, USA.)

  • Lee Chusak

    (Department of Mechanical Engineering and Materials Science Washington University in St. Louis, St. Louis, USA.)

Abstract

An equilibrium economic model for policy evaluation related to electricity generation at national and individual state level in U.S has been developed. The model takes into account the nonrenewable and renewable energy sources, demand and supply factors and environmental constraints (CO2 emissions). Economic policy analysis experiments are carried out to determine the consequences of switching the sources of electricity generation under two scenarios: in first scenario, a switch from coal to renewable sources is made for 10% of electricity generation; in the second scenario, the switch is made for 10% of electricity generation from coal to coal with clean coal technology by employing CO2 capture and sequestration (CCS). The cost of electricity generation from various non-renewable and renewable sources is different and is taken into account in the model. The consequences of this switch on supply and demand, employment, wages, and emissions are obtained from the economic model under three scenarios: (1) energy prices are fully regulated, (2) energy prices are fully adjusted with electricity supply fixed, and (3) energy prices and electricity supply both are fully adjusted. The model is applied to the states of California and Illinois, and at national level.

Suggested Citation

  • Ramesh Agarwal & Zheming Zhang & Lee Chusak, 2012. "Economics of Carbon Dioxide Sequestration versus a Suite of Alternative Renewable Energy Sources for Electricity Generation in U.S., California and Illinois," International Journal of Energy Economics and Policy, Econjournals, vol. 2(3), pages 184-200.
    • Handle: RePEc:eco:journ2:2012-03-10
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    References listed on IDEAS

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    1. Ramesh Agarwal & Lee Chusak & Zheming Zhang, 2011. "Economics of Carbon Dioxide Sequestration and Mitigation versus a Suite of Alternative Renewable Energy Sources for Electricity Generation in U.S," International Journal of Energy Economics and Policy, Econjournals, vol. 1(4), pages 78-94.
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    Cited by:

    1. Raghid Farhat & Nesreen K. Ghaddar & Kamel Ghali, 2014. "Investing in PV Systems utilizing Savings from Building Envelop Replacement by Sustainable Local Material: A Case Study in Lebanese Inland Region," International Journal of Energy Economics and Policy, Econjournals, vol. 4(4), pages 554-567.

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      More about this item

      Keywords

      Carbon dioxide sequestration and mitigation; Electricity generation; Renewable energy; State-level analysis;
      All these keywords.

      JEL classification:

      • C54 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Quantitative Policy Modeling
      • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
      • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
      • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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