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Why Do States Adopt Renewable Portfolio Standards?: An Empirical Investigation

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  • Thomas P. Lyon
  • Haitao Yin

Abstract

Renewable portfolio standards (RPSs) for electricity generation are politically popular in many U.S. states although economic analysis suggests they are not first-best policies. We present an empirical analysis of the political and economic factors that drive state governments to adopt an RPS, and the factors that lead to the inclusion of in-state requirements given the adoption of an RPS. Although advocates claim an RPS will stimulate job growth, we find that states with high unemployment rates are slower to adopt an RPS. Local environmental conditions and preferences have no significant effect on the timing of adoption. Overall, RPS adoption seems to be driven more by political ideology and private interests than by local environmental and employment benefits, raising questions as to when environmental federalism serves the public interest.

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Bibliographic Info

Article provided by International Association for Energy Economics in its journal The Energy Journal.

Volume (Year): Volume 31 (2010)
Issue (Month): Number 3 ()
Pages: 133-158

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Handle: RePEc:aen:journl:2010v31-03-a07

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Cited by:
  1. Richard Schmalensee, 2011. "Evaluating Policies to Increase the Generation of Electricity from Renewable Energy," Working Papers 1108, Massachusetts Institute of Technology, Center for Energy and Environmental Policy Research.
  2. Delmas, Magali A. & Montes-Sancho, Maria J., 2011. "U.S. state policies for renewable energy: Context and effectiveness," Energy Policy, Elsevier, vol. 39(5), pages 2273-2288, May.
  3. Johannes Urpelainen, 2012. "How do electoral competition and special interests shape the stringency of renewable energy standards?," Environmental Economics and Policy Studies, Society for Environmental Economics and Policy Studies - SEEPS, vol. 14(1), pages 23-34, January.
  4. Gireesh Shrimali & Steffen Jenner & Felix Groba & Gabriel Chan & Joe Indvik, 2012. "Have State Renewable Portfolio Standards Really Worked?: Synthesizing Past Policy Assessments," Discussion Papers of DIW Berlin 1258, DIW Berlin, German Institute for Economic Research.
  5. Jenner, Steffen & Ovaere, Lotte & Schindele, Stephan, 2012. "The impact of private interest contributions on energy policy making," Open Access publications from Katholieke Universiteit Leuven urn:hdl:123456789/351496, Katholieke Universiteit Leuven.
  6. Fischer, Carolyn & Preonas, Louis, 2010. "Combining Policies for Renewable Energy: Is the Whole Less than the Sum of Its Parts?," Discussion Papers dp-10-19, Resources For the Future.

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