Have State Renewable Portfolio Standards Really Worked?: Synthesizing Past Policy Assessments
AbstractRenewable portfolio standards (RPS) are the most popular U.S. state-level policies for promoting deployment of renewable electricity (RES-E). While several econometric studies have estimated the effect of RPS on in-state RES-E deployment, results are contradictory. We reconcile these studies and move toward a definitive answer to the question of RPS effectiveness. We conduct an analysis using time series cross sectional regressions - including the most nuanced controls for policy design features to date - and nonparametric matching analysis. We find that higher RPS stringency does not necessarily drive more RES-E deployment. We examine several RPS design features and market characteristics (including REC unbundling, RPS in neighboring states, out-of-state renewable energy purchases) that may explain the gap between effective and ineffective policies. We also investigate other RES-E policies and technology-specific effects. Ultimately, we show that RPS effectiveness is largely explained by a combination of policy design, market context, and inter-state trading effects.
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Bibliographic InfoPaper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 1258.
Length: 40 p.
Date of creation: 2012
Date of revision:
Renewable energy; Renewable portfolio standards; Panel data models; Matching analysis;
Find related papers by JEL classification:
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
- Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-12-15 (All new papers)
- NEP-ENE-2012-12-15 (Energy Economics)
- NEP-ENV-2012-12-15 (Environmental Economics)
- NEP-REG-2012-12-15 (Regulation)
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