Is real-time pricing green?
Subtitle: the environmental impacts of electricity demand variance
By: Stephen P. Holland, Erin T. Mansur.
Contributors: Mansur, Erin.; National Bureau of Economic Research.
Series: NBER working paper series -- no. 13508.; Working paper series (National Bureau of Economic Research) -- working paper no. 13508.
Publisher: National Bureau of Economic Research
Published: 2007
Place of publication: Cambridge, Mass
Language: eng
Number of pages: 45
Subjects: Electricity -- Prices -- Environmental aspects -- United States -- Econometric models
Description: Real-time pricing (RTP) of electricity would improve allocative efficiency and limit wholesalers' market power. Conventional wisdom claims that RTP provides additional environmental benefits. This paper argues that RTP will reduce the variance, both within- and across-days, in the quantity of electricity demanded. We estimate the short-run impacts of this reduction on SO2, NOx, and CO2 emissions. Reducing variance decreases emissions in regions where peak demand is met more by oil-fired capacity than by hydropower, such as the Mid-Atlantic. However, reducing variance increases emissions in more US regions, namely those with more hydropower like the West. The effects are relatively small.
Notes: "October 2007"

Includes bibliographical references (p. 18-22).

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