CO2 Pricing Pass-Through to Electricity Prices under Partial Regulations
Location
Innovation Lab, Room 213
Start Date
4-2-2025 9:30 AM
End Date
4-2-2025 10:00 AM
Presentation Date
2 April 2025, 9:30am - 10:00am
Biography
Love Gami is a junior at Missouri University of Science and Technology, pursuing a degree in Information Science and Technology. His academic journey has been shaped by a strong interest in research, particularly in the intersection of economics and environmental policy. Since Fall 2023, Love has been conducting undergraduate research in the Department of Economics under the guidance of Professor Yishu Zhou. His work focuses on analyzing the impact of cap-and-trade policies and carbon taxes on electricity pricing, exploring the complexities of carbon price pass-through under partial regulation. This research has deepened his passion for data-driven analysis and policy evaluation, inspiring him to further investigate the economic and technological implications of sustainability initiatives.
Meeting Name
2025 - Miners Solving for Tomorrow Research Conference
Department(s)
Economics
Document Type
Presentation
Document Version
Citation
File Type
text
Language(s)
English
Rights
© 2025 Love Gami, All rights reserved
CO2 Pricing Pass-Through to Electricity Prices under Partial Regulations
Innovation Lab, Room 213
Comments
Advisor: Yishu Zhou
Abstract:
With climate change becoming a global issue, carbon trading has gained attention as a key solution to reducing carbon emissions. However, it raises concerns about how much polluters pass the extra carbon costs to electricity prices. This study aims to assess the impact of CO2 pricing on electricity prices in the Pennsylvania-New Jersey-Maryland interconnection (PJM) market, where some states are subject to carbon regulation while others are not. Our findings reveal a significant impact of CO2 prices across all regulated areas, encompassing both day-ahead and real-time markets. Interestingly, the impact extends to non-regulated areas, indicating a spillover effect within the PJM market. The increase in electricity prices in unregulated areas negatively correlates with the distance to regulated areas. The strongest impact is observed during peak hours. These findings highlight how partial carbon regulations in one area could influence electricity prices across the entire energy market.