Evaluating Policies to Increase Electricity Generation from Renewable Energy
Name
Schmalensee-Evaluating Policies 2012.pdf
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305.16 KB
Format
Adobe PDF
Checksum (MD5)
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Author(s)
Schmalensee, Richard
Date Issued
January 2012
Journal
Review of Environmental Economics and Policy
Publisher
Oxford University Press
Citation
Schmalensee, R. “Evaluating Policies to Increase Electricity Generation from Renewable Energy.” Review of Environmental Economics and Policy 6.1 (2011): 45–64.
Version
Author's final manuscript
Abstract
Building on a review of experience in the United States and the European Union, this article advances four main propositions concerning policies aimed at increasing electricity generation from renewable energy. First, who bears the short-run costs of programs to subsidize the generation of electricity from renewable sources varies with the organization of the electric power industry, and this variation may be a significant contributor to such programs’ political attractiveness in U.S. states. Second, despite the greater popularity of feed-in tariff schemes worldwide, renewable portfolio standard (RPS) programs may involve less long-run social risk. Third, in contrast to the European Union’s approach to reducing carbon dioxide emissions, its renewables program is almost certain not to minimize the cost of achieving its goals. Fourth, state RPS programs in the United States are also almost certain to cost more than necessary, even though most use market mechanisms. To support this last proposition I provide a fairly detailed description of actual markets for renewable energy credits and their shortcomings.
MIT Department
Sloan School of Management
Terms of Use
Creative Commons Attribution-Noncommercial-Share Alike 3.0
Persistent DSpace Link
DOI of Published Version
https://doi.org/10.1093/reep/rer020
