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Electricity pricing can be used to shift the timing of electricity demand, but the choice of price signals is highly constrained. Consumer rates are updated every few years and limited to simple daily profiles, yet must capture the complex dynamics of a changing electricity system. Emission factors (EFs) were developed as an evaluation tool, but are increasingly used as demand response (DR) signals. Given these constraints, can they be effective? We evaluate the emissions impact of EF-based electricity rates with and without supply-side emissions pricing. We study controlled electric vehicle (EV) charging in the Western U.S. up to 2037 by coupling an electricity system dispatch model and a data-driven EV charging model. We compare average and short-run marginal EFs with a new medium-run marginal EF that better matches the timeline of electricity rate updates. We find that a stable supply-side signal makes DR more valuable: DR reduces emissions by up to 6% with supply-side carbon pricing or just 2% without it. Medium-run marginal EFs yield the most consistent emission reductions, but constraints on charging flexibility limit their impact. We recommend policymakers base rates for DR on medium-run marginal emission factors and implement supply-side carbon pricing to facilitate greater emission reductions.
Powell et al. (Fri,) studied this question.