Apr 27 - Karen Palmer, Resources for the Future
Economic and Energy Impacts from Maryland’s Potential Participation in the Regional Greenhouse Gas Initiative 

Based on Report co-authored by team of researchers from the University of Maryland, Resources for the Future, Johns Hopkins University and Towson University

In April, 2006, Maryland enacted the Healthy Air Act, mandating reductions in three major pollutants from coal-fired power plants: nitrogen oxides (NOx), sulfur dioxide (SO2) and mercury and requiring Maryland to become a full participant of the Regional Greenhouse Gas Initiative (RGGI). As a participant in RGGI, Maryland joins a consortium of Northeastern and Mid-Atlantic states prescribing a common policy for reducing CO2 emissions from power plants via a market-based cap-and-trade program. 

To best study the impacts of joining RGGI on the state, the Maryland Department of the Environment commissioned a study to assess the impacts of Maryland joining RGGI on power generators, rate payers and the economic welfare of the state.  The methodology and results of this study will be described in this presentation with a particular focus on the electricity sector simulation modeling. 

The main conclusions of this study indicate that, overall, joining RGGI would have a limited impact on the economy and electric power markets in Maryland. Maryland joining RGGI lowers net electricity demand in Maryland as a result of energy efficiency investments funded by revenues from the sale of CO2 emission allowances apportioned to Maryland.  The policy has virtually no effect on the price of electricity paid by rate payers in Maryland.  The policy also reduces coal and natural gas-generation in Maryland as the state reduces exports to neighboring regions and slightly increases reliance on power imports from out of state. However, the policy does not lead to significant retirement of existing in-state generating capacity.   Emission of CO2 from electricity generators fall as a result of the policy as does the price of RGGI CO2 emission allowances.

Karen Palmer's research interests include the environmental and economic consequences of electricity restructuring and of new environmental policy proposals targeted at the electricity sector; the regulation of solid waste and recycling; and the cost-effectiveness of environmental regulation. Palmer also is studying the costs and environmental benefits of the product stewardship movement, which among other things encourages industry to play a more active role in dealing with the environmental consequences of products at the end of their useful lives...

More information on our speaker from Resources for the Future