Optimal endogenous carbon taxes for electric power supply chains with power plants

In this paper, we develop a modeling and computational framework that allows for the determination of optimal carbon taxes applied to electric power plants in the context of electric power supply chain (generation/distribution/consumption) networks. The adoption of carbon/pollution taxes both internationally and regionally has been fueled by global climate change and fuel security risks with a significant portion of such policy interventions directed at the electric power industry. The general framework that we develop allows for three distinct types of carbon taxation environmental policies, beginning with a completely decentralized scheme in which taxes can be applied to each individual power generator/power plant in order to guarantee that each assigned emission bound is not exceeded, to two versions of a centralized scheme, one which assumes a fixed bound over the entire