An assessment of alternative carbon mitigation policies for achieving the emissions reduction of the Clean Power Plan: Case study for the state of Indiana

Abstract

National carbon mitigation policy included in the Clean Power Plan (CPP) targets electric power generation facilities and may have substantial impacts at the national level. The subnational impacts will vary because the level of dependence on coal for electricity generation varies substantially across states. Indiana represents a state where the CPP impacts may be relatively large due to heavy dependence on coal for electricity generation. Therefore, this paper presents analysis of the efficacy and cost of alternative approaches to carbon mitigation policy, taking Indiana as an example.A state-level energy system model, IN-MARKAL, was developed based on the MARKAL framework to explore alternative policy scenarios. Results show that a renewable portfolio standard (RPS) is relatively cost effective in achieving carbon emissions reduction for Indiana from the perspective of the power system alone, but that the RPS may also lead to a generation mix dominated by coal and wind. Carbon cap and carbon tax outperform the RPS when considering the entire energy system modeled in IN-MARKAL, which also lead to a more diverse generation portfolio for the state.