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Estimating impact of regional greenhouse gas initiative on coal to gas switching using synthetic control methods

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  • Kim, Man-Keun
  • Kim, Taehoo

Abstract

Fuel switching from coal to much cleaner natural gas in electricity generation is one of significant factors explaining the recent substantial reduction in greenhouse gas emissions in the Regional Greenhouse Gas Initiative (RGGI) region (northeastern U.S.). Coal to gas switching has been triggered by the recent shale gas revolution, which the entire U.S. has experienced, not the RGGI region alone. If RGGI as a cap-and-trade carbon program did not work effectively, the rate of fuel switching would have been similar to that of other U.S. states. To estimate the effects of RGGI implementation in terms of the fuel switching, we use the synthetic control method for comparative case studies. Results provide a strong evidence that coal to gas switching has been actually accelerated by RGGI implementation. RGGI increases gas share in electricity generation in the RGGI region by roughly 10–15% point higher than the synthetic RGGI.

Suggested Citation

  • Kim, Man-Keun & Kim, Taehoo, 2016. "Estimating impact of regional greenhouse gas initiative on coal to gas switching using synthetic control methods," Energy Economics, Elsevier, vol. 59(C), pages 328-335.
    • Handle: RePEc:eee:eneeco:v:59:y:2016:i:c:p:328-335
    DOI: 10.1016/j.eneco.2016.08.019
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    References listed on IDEAS

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    8. Daniel Albalate & Germà Bel, 2018. "“Do government formation deadlocks damage economic growth? Evidence from history’s longest period of political deadlock”," IREA Working Papers 201817, University of Barcelona, Research Institute of Applied Economics, revised Jul 2018.
    9. Linh Pham & Travis Roach, 2024. "Spillover benefits of carbon dioxide cap and trade: Evidence from the Toxics Release Inventory," Economic Inquiry, Western Economic Association International, vol. 62(1), pages 449-467, January.
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    11. Lee, Kangil & Melstrom, Richard T., 2018. "Evidence of increased electricity influx following the regional greenhouse gas initiative," Energy Economics, Elsevier, vol. 76(C), pages 127-135.
    12. Wu, Rongxin & Tan, Zhizhou & Lin, Boqiang, 2023. "Does carbon emission trading scheme really improve the CO2 emission efficiency? Evidence from China's iron and steel industry," Energy, Elsevier, vol. 277(C).
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    14. Marion Leroutier, 2021. "Carbon Pricing and Power Sector Decarbonisation: Evidence from the UK," Working Papers halshs-03265636, HAL.
    15. Yan, Jingchi, 2021. "The impact of climate policy on fossil fuel consumption: Evidence from the Regional Greenhouse Gas Initiative (RGGI)," Energy Economics, Elsevier, vol. 100(C).
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    17. Marion Leroutier, 2021. "Carbon Pricing and Power Sector Decarbonisation: Evidence from the UK," CIRED Working Papers halshs-03265636, HAL.

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    More about this item

    Keywords

    Coal to gas switching; Regional greenhouse gas initiative; Synthetic control method;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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