Macroeconomic impacts of clean coal technologies and acid rain legislation: A comparative analysis

Abstract

In 1987, the National Association of Manufacturers published a study documenting the negative macroeconomic impacts that could occur if proposed acid rain legislation were passed (NAM 1987). These negative impacts would result from the substantially higher electricity rates that would be needed to finance conventional pollution-control retrofits. The US Department of Energy's Office of Fossil Energy (DOE/FE) wanted to evaluate the macroeconomic impacts of nonregulatory approaches to reduce the emissions of acid rain precursors. DOE/FE therefore directed Argonne National Laboratory (ANL) to determine the potential for clean coal technologies (CCTs) to satisfy future electric load growth and achieve greater long-term reductions in emissions at a lower cost than could be achieved through a legislative mandate. This study documents the macroeconomic impacts of CCT deployment without acid rain legislation and compares these results with the corresponding impacts of using conventional technologies and meeting mandatory emission reductions. The Argonne Utility Simulation (ARGUS) model was used to determine the least-cost solution and incremental levelized system costs* over the period 1995-2030 for three scenarios: (1) a baseline scenario, in which no acid rain controls are mandated and no CCTs are deployed; (2) an acid rain (AR) scenario, in which legislation (S. 1894, 100th Congress) more » is mandated but no CCTs are deployed; and (3) a CCT scenario, in which maximum CCT deployment (specifically, integrated gasification combined-cycle or IGCC technology in repowering and new or greenfield'' applications) occurs but no acid rain legislation is mandated. The Data Resources Inc. (DRI) annual macroeconomic model (which was extended from 2010 to 2030) was used to compute the macroeconomic impacts of the AR and CCT scenarios. 2 refs., 28 figs. « less