The fundamental approach of marginal emissions models in the literature is very similar: they start with raw electricity generation and emissions data available from the US EPA at an hourly frequency by every major fossil fuel-fired power plant in the United States (via continuous emissions monitoring system, CEMS). A similar approach applies in other countries where data are available. Each then applies regression-based modeling to ask, every time a rise or fall in electricity demand occurs in a given place and time, which power plants actually increase or decrease their output in response? This allows a modeler to compare how marginal emissions rates vary by time and place. For example, by running such regressions separately for day and night periods, such models can compare the marginal emissions caused by using electricity during the day or during the night.
WattTime believes strongly in such empirical modeling techniques because they are driven almost purely by the data and require almost no assumptions. This is part of a growing trend in economics and social sciences towards increasingly questioning the validity of assumption-driven models, and replacing them instead with almost purely data-driven causal models, a trend known as the
“credibility revolution”. The most notable proponent of this approach,
Esther Duflo of MIT, won the 2019 Nobel prize in economics for this innovation.
WattTime staff have run numerous tests of how much Esther Duflo’s fundamental insight of questioning assumption-driven models applies to the energy sector and shown that most basic assumptions
often fail to hold up in the real world. These and other insights have deepened the WattTime team’s conviction that empirical models are essential for accurate marginal emissions analysis.