Notes

1 Energy Information Administration, Annual Energy Outlook 2004, DOE/EIA-0308(2004), (Washington, DC, January 2004), http://www.eia.doe.gov/oiaf/aeo/index.html.

2 For pdf versions of the bills, see S.366:http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=108_cong_bills&docid=f:s366is.txt.pdf, S.843:http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=108_cong_bills&docid=f:s843is.txt.pdf, S.1844:http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=108_cong_bill&docid=f:s1844is.txt.pdf.

3 Calculations based on aeo2004.d101703e, Table 117, electricity sector emissions of NO_x in 2001 equal to 4.75 million tons, electricity sector emissions of SO₂ in 2001 equal to 10.63 million tons, and electricity sector emissions of mercury in 2001 equal to 49.14 tons.

4 Based on reference case run aeo2004.d101703e.

5 Based on reference case run aeo2004.d101703e, CO₂ emissions for 2020 equal 2,989 million metric tonnes of carbon dioxide equivalent or 815 (2,989 x 12/44) million metric tonnes of carbon equivalent and CO₂ emissions for 2025 equal 3,299 million metric tonnes of carbon dioxide equivalent or 900 (3,299 x 12/44) million metric tonnes of carbon equivalent.

6 Allowances sold directly under the safety valve provisions are to be withheld from allowances that otherwise would have been auctioned. However, if this exhausts the pool available in the auction for three consecutive years, the Environmental Protection Agency is required to conduct a study “to determine whether revisions to the relevant allowance trading program are necessary and shall report the results to the Congress.”

7 The size of the new unit reserve is to be determined by the Administrator of the Environmental Protection Agency and the Secretary of Energy. In this analysis, it is assumed that new covered units receive allowances at the same output rate as existing covered units.

8 For more discussion of the impacts of various emission allocation approaches see Beamon, Leckey, and Martin, Power Plant Emissions Reductions Using a Generation Performance Standard, web site http://www.eia.doe.gov/oiaf/servicerpt/gps/pdf/gpsstudy.pdf; and Burtraw, Carbon Emission Trading Costs and Allowance Allocations: Evaluating the Options ,web site http://www.rff.org/resources_archive/pdf_files/145_burtraw.pdf.

9 C. Fischer, Rebating Environmental Policy Revenues: Output-based Allocations and Tradable Performance Standards (Washington, DC: Resources for the Future, January 21, 1999).

10 The emissions cap in the Clean Air Planning Act is given in units of CO₂, but additional CO₂ allowances can come from projects that reduce any of the main six greenhouse gases specified in the Kyoto Protocol or increase sequestration.

11 For more information about the representation of marginal abatement curves in the National Energy Modeling System see Energy Information Administration, Analysis of S. 139, the Climate Stewardship Act of 2003, Appendix B, SR/OIAF/2003-3, (Washington, DC, June 2003), http://www.eia.doe.gov/oiaf/servicerpt/ml/pdf/sroiaf(2003)02.pdf.

12 Energy Information Administration, Annual Energy Outlook 2004, DOE/EIA-0308(2004), (Washington, DC, January 2004), http://www.eia.doe.gov/oiaf/aeo/index.html.

13 The key updates are the calibration of natural gas prices and consumption to the latest available information. Other minor updates were also incorporated.

14 Four gigawatts of the total increase in nuclear capacity in the reference case and the Jeffords case result from uprates at existing plants rather than new plant additions.

15 All new coal plants are assumed to be built with SO₂ scrubbers.

16 The removal of mercury as an additional benefit of removing NO_x, SO₂, and particulates is referred to as a co-benefit.

17 A 7-percent discount rate is used in these calculations.

18 The Carper bill requires that all coal facilities either remove a minimum percentage (50 percent) between 2009 and 2012, and 70 percent in 2013 and later) of the mercury in the coal burned or meet an output-based rate to be set by the EPA Administrator.

19 Power Engineering, May 2003, Uniqueness of SCR Retrofits Translates into Broad Cost Variations.

20 Ibid

21 The negative cost options were set to $1 in this analysis.

22 For discussion of this topic see Jaffe, A.B., R.G. Newell and R.N. Stavins (1999), Energy-Efficient Technologies and Climate Change Policies: Issues and Evidence, Climate Issue Brief 19, Resources for the Future, Washington, DC, http://www.rff.org/issue_briefs/PDF_files/ccbrf19.pdf.

23 For further discussion of the assumptions used from the slow oil and gas technology case see, the Energy Information Administration, Annual Energy Outlook 2004, DOE/EIA-0383(2004) (Washington, DC, January 2004), pages 254-255.