Power systems expansion planning with time-varying CO<mml:math xmlns:mml="http://www.w3.org/1998/Math/MathML" display="inline" id="d1e1511" altimg="si36.svg"><mml:msub><mml:mrow /><mml:mrow><mml:mn>2</mml:mn></mml:mrow></mml:msub></mml:math>tax

This article analyzes the effects of implementing a two-stage carbon tax on a ten-year power expansion planning model. The timing effect of the tax is analyzed by studying the costs, capacity investments, economic dispatch, and CO2 emissions in fixed (flat) and two-stage tax schemes. Results show that, under the absence of political economy constraints, the most cost-effective solution is to have a low CO2 tax in the first stage and an optimal...