Variation in outcomes and leakage potential across Clean Power Plan compliance designs

This paper presents results from a “modeler's choice” suite of runs that model the US Environmental Protection Agency's proposed Clean Power Plan (CPP) regulating carbon dioxide emissions from existing power plants under Section 111d of the Clean Air Act more closely than does the core EMF 31 Technology Performance Standard (TPS) case. While the TPS case imposed a national emissions rate standard for the power sector, the CPP imposes its budgets at the state level and provides states a great deal of flexibility in designing their implementation approaches. States may convert their CPP rate targets to a mass basis, and they may join with other states in multi-state trading plans. Under the proposed rule, EPA also left open the question of how new gas units were to be treated under the CPP. This design flexibility leads to a range of possible outcomes when it comes to the impacts of the proposed CPP on emissions, policy costs, electricity generation patterns, and gas markets. We analyzed 40 CPP scenarios in the Framework for Analysis of Climate-Energy-Technology Systems (FACETS), permuting these three design dimensions along with energy efficiency and low shale resource scenarios.