Consumption effects of electricity decarbonization: Evidence from California and the Pacific Northwest

This paper estimates the price-induced impacts of decarbonization policy on CO2 emissions in California and the Pacific Northwest. We document that retail demands for electricity and natural gas by customer class are highly price-inelastic. Based on the heat rates of natural-gas-fired generation, we find that a 10% electricity rate increase due to electricity decarbonization may not have the consumption effects of further reducing the region's CO2 emissions.