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Advancement: Analyzing Impacts of Climate Change on Energy Market using Bottom-up and Top-down model

Speaker Name: 
Duan Zhang
Speaker Title: 
PhD Student (Advisor: Yihsu Chen)
Speaker Organization: 
Technology & Information Management
Start Time: 
Wednesday, December 12, 2018 - 1:00pm
End Time: 
Wednesday, December 12, 2018 - 3:00pm
Engineering 2, Room 486
Yihsu Chen

Abstract:   With the growing concern about the effects of climate change, the United States is on the brink of implementing a federal policy to limit its emissions of greenhouse gases (GHGs). For example, in 2015, the Obama government has introduced Clean Power Plan (CPP), aiming to reduce carbon pollution by shifting electric power sector toward cleaner energy sources. On the other hand, more and more attention is drawn on exploring resilience options and adaptation measures to climate change impacts. In order to implement the cost-effective resilience options, it's important for the regional planner and policy makers to understand not only the local economic impacts of climate-change-induced hazards, but also the spillover effect to other sectors and regions.

The thesis proposal focuses on two main themes. The first theme involves examining the two types of emission trading programs considered under the CPP: a mass-based cap-and-trade (C&T) program, and a performance-based trading program. While a mass-based program sets a total emission cap for a region, a performance-based program under CPP relies on trading the emission rate credits (ERCs), which represent an equivalent MWh of energy generated from or saved by zero associated Carbon dioxide emissions, to reduce emission costs. The proposed research examines the theoretical properties of the performance-based policy and compares its market performance to a traditional mass-based C&T program using bottom-up simulation models that account for transmission and technology heterogeneity. The second theme entails developing a top-down computable general equilibrium (CGE) model with bilateral commodity trade flow to investigate the regional economic impacts of climate-change-induced extreme weather events, such as sea level rise and wildfire, with a focus on natural gas sector in the northern California region. The top-down model allows us to assess the general equilibrium effects of climate change.