This EPRI report describes how accounting for and valuing carbon dioxide (CO2) emissions — and more broadly greenhouse gases (GHGs) emissions — has been implemented in wholesale power markets in the United States and the European Union. This includes programs such as the GHG emissions "cap-and-trade" regulatory programs operating today in California, Washington, and the 11 states in the northeast United States that comprise the Regional Greenhouse Gas Initiative. It also includes the EU Emissions Trading Scheme. This report explores how these carbon markets and the related wholesale electricity markets have tried to address the technical challenges associated with implementing carbon pricing, particularly in situations in which the footprint of a wholesale power market overlaps with different carbon polices across the footprint. This report also describes the challenges associated with accounting for GHG emissions in the context of wholesale power markets in which electricity is centrally dispatched to end-use customers.
Authors Adam Diamant