110 Iowa L. Rev. 2139 (2025)
Abstract
Instead of a “first best” decarbonization approach such as a national carbon tax, U.S. efforts to decarbonize the electric power sector draw heavily on the decentralized, often fragmented tools of state utility regulation. These “second best” decarbonization approaches can create many benefits, but they also present several challenges for energy markets. In this Essay, I focus attention on how interstate transmission planning and cost allocation can help to mediate and improve the efficacy of second best decarbonization policies. Despite much-needed recent improvements to federal transmission policies, opportunities remain to continue to reform transmission grid regulation to improve second best decarbonization in the future.