Clean Energy in New York State: The Role and Economic Impacts of a Carbon Price in NYISO’s Wholesale Electricity Markets
White Paper, October 2019
As part of New York State’s ambitious program for eliminating greenhouse gas emissions from all man-made sources by 2050, an Analysis Group team prepared a report analyzing the impacts of introducing a first-of-its-kind carbon pricing mechanism into the wholesale electricity markets administered by the New York Independent System Operator (NYISO). The team was led by the report’s coauthors, Senior Advisor Susan F. Tierney and Principal Paul J. Hibbard.
The report originally was requested by NYISO to supplement and expand on previous analyses of the impacts of introducing a carbon pricing mechanism. Subsequently, the New York State Legislature passed the Climate Leadership and Community Protection Act (CLCPA), which arguably is the strongest set of climate policies adopted anywhere in the US.
As a result, the Analysis Group team altered the focus of its analysis from whether New York would pursue aggressive goals for reducing carbon emissions, to how NYISO’s proposed carbon pricing mechanism can help New York meet its new statutory requirements for decarbonizing the electric system through efficient market design and at the lowest cost. In their report, the coauthors explore the implications of a NYISO carbon pricing mechanism for assisting New York in accomplishing its CLCPA goals, including potential risks and benefits of adopting a carbon price.
Read the Summary for Policy Makers