Analyzing the Closure of Coal-Fired Power Plants in the Regional Greenhouse Gas Initiative States 2000-2015

Abstract

The Regional Greenhouse Gas Initiative (RGGI) is a cap-and-trade program in the Northeast and Mid-Atlantic covering power sector carbon dioxide emissions. Many expect policies aimed at reducing carbon dioxide emissions, like RGGI, to cause coal-fired power plant closures as a way of complying with emissions reduction requirements, given the relatively higher carbon intensity of coal plants (as opposed to other fuel types) and the limited availability of carbon dioxide pollution control technology. This analysis qualitatively and quantitatively evaluates coal closures within the RGGI states between 2005 and 2015 to identify the extent to which RGGI caused these closures. A qualitative analysis of media reports and press releases surrounding the closures indicates that RGGI did not play a role in any of the closures; however, regression analysis suggests that RGGI did have a statistically significant impact in causing closures. The RGGI closures are compared to closures in the non-RGGI states as well as closures occurring before the policy was announced.