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allowances

Yes, it does. Unfortunately, some confusion persists about how energy efficiency measures can be applied to mass-based compliance within the Clean Power Plan. Fortunately, the answer can be summarized in two sentences: (1) In any situation, energy efficiency is a cost-effective way to reduce demand for electricity, both reducing emissions and helping to avoid or defer other mass-based compliance actions. (2) States can take action to develop customized plans to further encourage energy efficiency as a means for meeting mass-based compliance.

Emissions trading programs are a long-established mechanism used by environmental regulators to reduce air pollution from the electric sector. In this series of posts, we explore how EPA has designed the Clean Power Plan to facilitate the buying and selling of credits representing emissions reductions at fossil-fuel fired power plants. Part 1 focused on rate-based trading. Part 2 explores how states can trade allowances representing tons of CO2 emissions.