The Power of Carbon

This issue of Carbon Market Analyst North America takes a look at the power and transportation sectors under a carbon-constrained US economy. How will a national cap-and-trade system for greenhouse gases impact electricity prices and the relative prices of vehicle fuels? We show that price increases in the power sector could vary by region, depending on the fuel mix and the type of electricity market. The degree to which biofuels become competitive over gasoline depends on how policymakers measure their emissions.