Essays on carbon abatement and electricity markets

In the first chapter of this dissertation, I study the effects of a number of policies which affect the electric grid using the SuperOPF, a full AC optimization/simulation framework with optimal investment developed at Cornell University. A 36-node model of the Northeast Power Coordinating Council is used to test policies that aim to reduce CO2, other emissions, or otherwise impact the operation of the electric grid: a base case, with no new environmental legislation; enactment of the Kerry-Lieberman CO2 allowance proposal in 2012; following Fukishima, a retirement of all US nuclear plants by 2022 with and without Kerry-Lieberman; marginal damages from SO2 and NOX emissions charged to coal, gas and oil-fired generation; plug-in hybrid electric vehicle load filling; wind incentives in place; and two cases which combine these. The cases suggest that alternative policies may have very different outcomes in terms of electricity prices, emissions, and health outcomes. In all cases, however, the optimal strategy for future investment is investment in new natural gas combined cycle plants. Policies can change how much new generation is built, whether other plants are built, or what types of plants are retired.;The second chapter of my dissertation utilizes the SuperOPF and the model of the Northeast Power Coordinating Council to analyze the issue of carbon leakage. I analyze the effects of a regionally-limited carbon cap and trade program, the Regional Greenhouse Initiative (RGGI), when additional generating assets in non-affected states are included in the analysis. In the face of different carbon prices on generating assets in covered and non-covered states, generation is expected to shift from states bound by RGGI to states outside of RGGI. This carbon leakage may undermine some or all of the benefits of RGGI while simultaneously increasing prices for customers in the area. Even though carbon prices under RGGI are very low, some leakage is occurring, and this leakage will worsen if carbon prices increase. Ultimately, a unified policy offers greater carbon reduction at a lower cost, which would increase popular acceptance of such policies.;In the third chapter of this dissertation, my coauthors and I examine the issue of demand for carbon reductions. Recent large-scale field experiments have shown that peer information nudges can have significant effects on behavior, inducing people to reduce their production of negative externalities. Related work in psychology demonstrates that inducing feelings of personal culpability by showing people information about their peers can induce pro-social behavior. This study uses a contingent valuation experiment and a parallel lab experiment to further explore patterns of responses that have been suggested in the emerging literature on norm-based environmental interventions The field--level finding of asymmetric responses between those whose environmental or group impacts are above or below the norm is found to be robust across decision settings. However, substantial heterogeneity in responses to peer information is observed across a number of demographic and other respondent--specific dimensions not able to be explored in large scale field experiments, raising questions about the universality of peer-information effects and the design of such programs.