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Implications of Carbon Regulation for Green Power Markets

DescriptionThis paper examines the potential effects that emerging mandatory carbon markets have for voluntary markets for renewable energy, or green power markets. In an era of carbon regulation, green power markets will continue to play an important role because many consumers may be interested in supporting renewable energy development beyond what is supported through mandates or other types of policy support. The paper examines the extent to which GHG benefits motivate consumers to make voluntary renewable energy purchases and summarizes key issues emerging as a result of these overlapping markets, such as the implications of carbon regulation for renewable energy marketing claims, the demand for and price of renewable energy certificates (RECs), and the use of RECs in multiple markets (disaggregation of attributes). It describes carbon regulation programs under development in the Northeast and California, and how these might affect renewable energy markets in these regions, as well as the potential interaction between voluntary renewable energy markets and voluntary carbon markets, such as the Chicago Climate Exchange (CCX). It also briefly summarizes the experience in the European Union, where carbon is already regulated. Finally, the paper presents policy options for policymakers and regulators to consider in designing carbon policies to enable carbon markets and voluntary renewable energy markets to work together.
File Name 
Product TypeReport/Plans
URL http://www1.eere.energy.gov/analysis/pdfs/41076.pdf
Num of Pages69
Document Size983 KB
First Received11/17/2011 12:00:00 AM
Program NameEnergy Analysis
Keywordsrenewable energy; markets; carbon regulation; cap and trade; voluntary purchases; voluntary renewable energy markets; greenhouse gases; GHG; emissions; policy; policies; motivation; renewable energy certificates; REC; RECs
Print Date4/1/2007 12:00:00 AM
Product ID5241
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