This study evaluates the impact of market-based electricity dispatch on social welfare during the U.S. deregulation period from 1999 to 2012. By comparing observed market dispatch against counterfactual least-cost and least-emissions regimes, we find that while markets yielded modest reductions in CO2 and NOx damages through efficiency gains, they also triggered a sharp increase in SO2 damages. This increase was driven by expanded trade and a shift toward cheaper coal generation. The net effect was an annual increase in environmental damages of $2-11 billion, a figure that far surpasses the documented $3-5 billion in private cost savings. These losses were concentrated in early-adopting, coal-reliant regions with a high proportion of merchant generators. Our results show that while deregulated markets improved private efficiency, they created even larger social costs by amplifying environmental externalities, highlighting the need to align wholesale market rules with environmental goals.

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Transmission expansion does more than relieve congestion; it can also change how electricity systems respond to economic shocks. This paper studies whether Texas's Competitive Renewable Energy Zones (CREZ) transmission expansion altered the pass-through of fuel-price changes into electricity generation and emissions. Combining hourly generation, load, fuel-price, and emissions data, I examine whether additional transmission capacity changed the responsiveness of coal, natural gas, and renewable generation to fluctuations in fuel prices. By focusing on the interaction between infrastructure and market incentives, the paper provides new evidence on how transmission investment influences generation dispatch, fuel switching, and the environmental performance of competitive electricity markets.

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State-level policies, particularly Renewable Portfolio Standards (RPS), have been a primary driver of renewable energy adoption in the United States. While crucial for decarbonization, the expansion of renewable infrastructure carries its own ecological footprint, raising questions about its net environmental benefits. This study investigates how heterogeneous RPS design features, specifically the allowance of out-of-state Renewable Energy Credit (REC) trading and policy stringency, shape these outcomes. I find that states prioritizing in-state renewable capacity development successfully spur local infrastructure growth. However, this same focus impedes their ability to control emissions and reduce their carbon footprint effectively. These results illuminate a critical tension in clean energy policy, showing that RPS design creates a tradeoff between fostering a local green industry and achieving cost-effective emissions reductions.

Draft coming soon