An article by Mark Snead examining the potential impact of carbon constraints on electricity producers in Colorado, Kansas, Missouri, Nebraska, New Mexico, Oklahoma, and Wyoming was recently released by the Kansas City Fed.
From the introduction: “In the Federal Reserve’s Tenth District, six of seven states are coal dependent, generating two-thirds or more of their electricity from coal. Coal-intensive states face regulatory risk from increased restrictions on GHG emissions. Forecasts suggest GHG restrictions would rapidly accelerate the use of cleaner fuels, but would require extensive and expensive changes in the mix of generation capacity in many states.”
“This article examines the potential impact of national GHG restrictions on Tenth District energy producers and consumers. The findings suggest that GHG restrictions would lead to a structural change in the mix of fuels used to generate electricity in most District states, as well as increase electricity costs to District consumers.”
The article is on the bank’s website at www.KansasCityFed.org at http://www.kc.frb.org/publicat/econrev/pdf/12q1Snead.pdf