The Economic Impacts of the Clean Power Plan: How Studies of the Same Regulation Can Produce Such Different Resultsby and -
Various organizations have published forecasts of the economic impacts of the Clean Power Plan (CPP), EPA’s regulation that limits carbon dioxide emissions from power plants, with studies arriving at markedly different conclusions about the effect of the policy on electricity affordability and the overall economy. In this working paper, WRI presents a review of four economic studies of the CPP. We compare the assumptions of the CPP studies to expert forecasts and empirical information available at the time the studies were conducted.
Our findings suggest that modeling can be used to justify forecasts of highly positive or negative economic effects of climate regulations, depending on assumptions made with respect to technological progress, commodity prices, and policy implementation. In providing a framework for evaluating the studies' assumptions, this paper is a first step in our effort to promote transparency and impartiality in economic impact studies.