Skip to Main Content

Impacts of Energy and Environmental Policies

We have developed customized modeling tools to provide market participants with detailed insights into the impacts of national and regional government energy policies, including greenhouse gas (GHG) emissions programs.

Our market simulation tools include:

  • California Cap-and-Trade Model: This model internally analyzes the cross-sector tradeoffs and the interplay of complementary policies with the impact on GHG prices and the electric power sector. This model is used to help market participants understand energy market expectations based on potential trajectories of California’s policies.
  • Nodal Carbon Dispatch Simulations: These have been designed to allow appropriate unit commitment and dispatch simulation in interstate markets where some states have carbon emissions policies and other states do not. This unique modeling feature allows us to address potential issues of emissions reshuffling and multiple carbon regimes.
  • CO2 Scenario Impact Model (CO2 SIM): This model evaluates market-driven investment and retirement decisions over time by simulating capacity, energy, clean energy, and carbon markets.  The model determines prices for each market, given the current resource mix, near-term planned additions and retirements; demand for electricity, capacity, and clean energy; as well as fuel, variable, and investment costs.  SIM can be used to determine the economic and environmental impact of clean energy and low carbon policies and market designs and to evaluate the impact of shifting value streams on generation and transmission assets.


Below is a list of representative engagements for our Impacts of Energy and Environmental Policies practice.

Evaluation of wholesale electricity market interactions with different carbon policy designs

For the electricity regulator of an international market, Brattle experts evaluated the policy and market design options for implementing the government’s carbon policy within the guidelines of the policy constraints. We surveyed the advantages, disadvantages, and likely price impacts of rate-based and mass-based mechanisms in electricity market, interactions with the broader economy-wide offsets market, potential implications for the total national carbon budget, investment/retirement implications, approaches to accommodating new entry, interactions with current renewables standards, and alternative mass allocation approaches. Based on the regulator’s priorities and constraints, we designed two comprehensive policy design options that minimized the potential for investment and dispatch inefficiencies, one with a rate-based standard and one with mass-based.

Cap-and-Trade vs. carbon tax simulations

For a U.S. consortium of electric utilities, Brattle performed an evaluation of the merits of a cap-and-trade versus carbon tax approach to GHG pricing. The report considered the consequences of volatility in the price of emissions versus the uncertainty in quantity of realized emissions reduction that would result from the two different approaches. It also evaluated the effects of price uncertainty on likely willingness of power plant owners and environmental control developers to make long-term investments in new emissions control technologies, as well as effects on tax revenues available for redistribution to customers or generators with stranded costs.

News & Knowledge