Last week, the Center for Climate and Energy Solutions (C2ES) launched its Solutions Forum for businesses, cities, and states. The Forum will ultimately make recommendations in three main areas: market-based strategies under the CPP, innovative finance for climate-related energy efforts, and strengthening climate resilience.
C2ES states that it will explore the “options and obstacles to using market-based approaches” in implementing the CPP. C2ES released a report, Market Mechanisms: Understanding the Options, in April. While this report was prepared before EPA released the final Clean Power Plan, its overview and discussion of market mechanisms are still helpful. This report discusses examples of market-based policy options to reduce greenhouse gas emissions, including taxes and subsidies, cap-and-trade, baseline-and-credit, and renewable energy standards. The report also covers some examples of particular programs, including the acid rain program, the European Union Emissions Trading System, and cap-and-trade programs in the Northeast (Regional Greenhouse Gas Initiative) and in California.