Markets Drive Innovation: Why History Shows that the Clean Power Plan Will Stimulate a Robust Industry Response

Advanced Energy Economy (free download with registration)

When EPA releases the final Clean Power Plan this summer, regulators and industry will move to consider compliance options in earnest. While opponents contend that these options will be limited and costly, the track record of EPA regulations allowing for market-based compliance suggests otherwise. This report looks at outcomes under prior EPA rules, finding that when regulations allow for market-based compliance, efficient and active markets develop rapidly and industry responds with innovations that reduce compliance costs. Given the structure of the proposed CPP and the status of current markets for advanced energy technologies and services available as compliance options, the report predicts that the CPP will elicit a similarly robust market response.


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