University of South Florida Beyond Photovoltaics - Nanoscale Rectenna for Conversion of Solar and Thermal Energy to Electricity

The implementation of a CO2 emissions control scheme, either a cap-and-trade program with auctioned permits or a carbon tax, will provide the government with an important new source of revenue. Several economists advocate for the redistribution of this carbon revenue i.e., for the emissions control schemes to be revenue neutral. In this paper, we present an optimization model to obtain redistribution strategies of the carbon revenue collected by an electricity-sector emissions control scheme. We consider two types of subsidies through which the redistribution is accomplished: i) bid subsidies for low-emission generators, which are directed at lowering locational marginal prices throughout the power network, and ii) R & D subsidies, whose purpose is to improve the competitiveness of low-emission generators against fossil-fuel generators. We use empirical curves found in the literature to model the potential effect of R & D subsidies on the cost reduction of low-emission technologies. The use of the optimization model is demonstrated in a sample problem. Discriminatory and non-discriminatory subsidies scenarios are compared.