An Approach for Better Aligning the Nation's Clean Air and Clean Energy Goals

Policies to spur increased investment in renewable electricity generation can offer significant public benefits, including economic development and energy security, as well as improved public health and environmental quality owing to air pollution reductions. Congress has attempted to formally recognize these benefits by creating the Conservation and Renewable Energy Reserve (CRER) in the 1990 Clean Air Act (CAA) Amendments, which set aside a portion of the national SO2 allowance budget for renewable energy and energy efficiency. However, the CRER was severely underutilized, and has expired. This study considers modifications to CAA that would increase the number of emission allowances allocated to renewable energy generation to enable renewables to compete fairly in emission trading and clean air compliance markets, and estimates the economic and environmental benefits of these changes.