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Drivers and Impacts of Renewable Portfolio Standards

Author

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  • Thomas P. Lyon

    (Ross School of Business, University of Michigan, Ann Arbor, Michigan 48109)

Abstract

Renewable Portfolio Standards (RPSs) are a key policy measure used by states in the United States to increase their production of renewable electricity. Economic theory shows that RPSs are not first-best policy measures for mitigating greenhouse gas emissions or solving other environmental problems. Nevertheless, they have been politically popular, in part because states hope they will help create new jobs in what the states expect will be a growth industry. Research suggests that RPSs are supported by Democratic legislatures in states with good solar and wind potential, are more likely in states with restructured electricity markets, and are less likely in states heavily dependent on natural gas for electricity generation. Research also suggests that RPSs have been successful at increasing renewable generation capacity, have increased the cost of electricity modestly where they have been implemented, and reduce carbon emissions at a cost roughly consistent with estimates of the social cost of carbon.

Suggested Citation

  • Thomas P. Lyon, 2016. "Drivers and Impacts of Renewable Portfolio Standards," Annual Review of Resource Economics, Annual Reviews, vol. 8(1), pages 141-155, October.
  • Handle: RePEc:anr:reseco:v:8:y:2016:p:141-155
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    File URL: http://www.annualreviews.org/doi/10.1146/annurev-resource-100815-095432
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    Citations

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    Cited by:

    1. Munoz, Francisco D. & Pumarino, Bruno J. & Salas, Ignacio A., 2017. "Aiming low and achieving it: A long-term analysis of a renewable policy in Chile," Energy Economics, Elsevier, vol. 65(C), pages 304-314.
    2. Deschenes, Olivier & Malloy, Christopher & McDonald, Gavin, 2023. "Causal effects of Renewable Portfolio Standards on renewable investments and generation: The role of heterogeneity and dynamics," Resource and Energy Economics, Elsevier, vol. 75(C).
    3. Castagneto Gissey, Giorgio & Zakeri, Behnam & Dodds, Paul E. & Subkhankulova, Dina, 2021. "Evaluating consumer investments in distributed energy technologies," Energy Policy, Elsevier, vol. 149(C).
    4. Don Fullerton & Chi L. Ta, 2022. "What Determines Effectiveness of Renewable Energy Standards? General Equilibrium Analytical Model and Empirical Analysis," NBER Working Papers 29783, National Bureau of Economic Research, Inc.
    5. Jinhua Zhao, 2022. "Aggregate emission intensity targets: Applications to the Paris Agreement," Economic Inquiry, Western Economic Association International, vol. 60(4), pages 1875-1897, October.
    6. Pritchard, Zachary D. & Mills, Sarah, 2021. "Renewable energy requirements on the ballot: An analysis of county-level voting results," Energy Policy, Elsevier, vol. 148(PA).
    7. Acevedo, Giancarlo & Bernales, Alejandro & Flores, Andrés & Inzunza, Andrés & Moreno, Rodrigo, 2021. "The effect of environmental policies on risk reductions in energy generation," Journal of Economic Dynamics and Control, Elsevier, vol. 126(C).
    8. Rhodes, Ekaterina & Scott, William A. & Jaccard, Mark, 2021. "Designing flexible regulations to mitigate climate change: A cross-country comparative policy analysis," Energy Policy, Elsevier, vol. 156(C).
    9. Parrish Bergquist & Christopher Warshaw, 2023. "How climate policy commitments influence energy systems and the economies of US states," Nature Communications, Nature, vol. 14(1), pages 1-9, December.
    10. Cherry, Todd L. & Brimley, Peri M. & Longuevan, Joseph D. & Thunström, Linda, 2023. "In-state generation requirements and the acceptability of renewable portfolio standards," Utilities Policy, Elsevier, vol. 85(C).

    More about this item

    Keywords

    renewable energy; state policy; electricity; political economy;
    All these keywords.

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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