A comparison of Clean Power Plan forecasts for Wyoming: The importance of implementation and modeling assumptions

Debate regarding new policies to reduce greenhouse gas emissions, such as the Clean Power Plan (CPP) has focused on the significant implied changes such policies will have for the national energy system, and the national economy. Less debate, however, has occurred regarding the impact such policies will have on significant fossil fuel producing regions in the country. Such impacts are important to consider, both from an equity and political perspective. If some regions are impacted more than others across a national society, this could create political opposition that could undermine the implementation of such policies. The purpose of this paper is to present one such impact analysis, estimating the potential economic effects the CPP could have on Wyoming, the nation’s largest coal producing state. The paper also highlights how such estimates are heavily dependent on the initial simulation assumptions used to generate them. Using two sources of simulations, from Godby et al. (2015a), and a later set from the Energy Information Administration (EIA), estimates of the potential impact of the originally proposed CPP rules on Wyoming economy are described. Simulation results are shown to be highly sensitive to how policy is implemented, and modeling assumptions. Regardless of the simulation, however, economic impacts of the CPP are shown to be severe to a producing state like Wyoming, potentially reducing that state’s employment by over 3%, and reducing state revenues by 14% or more.