UC Davis

The energy industry is undergoing a rapid transformation in the United States. Climate change is leading to many of the changes, including market policy development, and the transition away from old technologies to new. The changes are leading to new challenges, real or perceived. These speed of these changes is resulting in the need for policy makers and electricity system planners to make decisions under uncertainty and modify their behavior as they learn from their policies and actions. In this dissertation I strive to understand how climate policies effect regions without climate policies, and the impacts of changing energy technologies on society. The first chapter of this dissertation takes up the effect of regional climate policies, and the second two take up the energy transition.

In the fist chapter of this dissertation,I conduct the first reduced form accounting analysis of leakage in the California electricity sector following the enactment of the Cap-and-Trade program. Leakage is the result of incomplete regulation, where in this context the Cap-and-Trade program only regulates a subset of the electricity market, leading to the unintended increase in carbon dioxide emissions through the substitution of generation from the regulated region to the unregulated region. The paper finds near-term emissions are below that of unaccounted for emissions, but utilization of coal is greater than accounted for by regulators. I then find across the enactment date of the Cap-and-Trade program emissions from unregulated entities increased by 26 percent as opposed to falling by 32 percent as reported. This implicates the need to find stronger methods to reduce imported emissions from unregulated entities.

In the third chapter of this dissertation,in collaboration with James Bushnell and David Rapson, we study the coal industry and labor. Coal plays an important role in the social zeitgeist to ensure communities maintain a quality labor force. We conduct a study on the impact of coal power plant retirements on local employment from 2010-2018, and find on average there is no impact to employment within the labor market. We implement an event study and synthetic control approach to estimate the dynamic effect of the retirement and find the accusations that the loss of a coal facility are largely attributable to secular trends. We further study the effect of labor market thickness on the impact of the retirements to find there is no statistical relationship with the labor market size. We find there is heterogeneity in the effect of a retirement, but there are no predictive variables to allow us to discern why there may be a large positive or negative effect. The findings are robust to multiple empirical approaches and specifications.

In the third chapter of this dissertation, also in collaboration with James Bushnell and David Rapson, we take advantage of energy technology deployment across California to study the relationship between emerging energy technologies. Specifically electric cars and residential solar, and their impacts on the reliability of the distribution grid. The results reveal that there is no impact associated with the deployment of new technologies on the grid. The findings suggest that grid planners are able to make the necessary investments to avoid adverse impacts from emerging technologies on grid reliability, and deployment should not be slowed. Our results find that there are minimal effects immediate impacts following deployment of these distributed technologies, but there is no relationship with the long-term impact from these technologies.