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Navigating just energy transitions: A DSGE analysis of renewable portfolio standards and technology innovations

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  • Liu, Yue
  • Xin, Baogui
  • Peng, Wei
  • Santibanez Gonzalez, Ernesto D.R.

Abstract

As the global energy landscape shifts toward sustainability, the Renewable Portfolio Standards (RPS) policy has emerged as a crucial tool for promoting renewable energy development. However, its potential impact on energy justice remains understudied. This paper aims to investigate the effects of RPS and energy-specific technology innovations on just energy transitions using a dynamic stochastic general equilibrium (DSGE) model. We construct a nine-sector DSGE model incorporating the RPS policy, energy storage, pollution-related health effects, and multiple technology shocks, and then conduct steady-state comparisons, impulse response analysis, and welfare evaluation in sequence. The results indicate that: (i) From a general equilibrium perspective, the implication of RPS on the just energy transition is quota-stringency dependent. (ii) The RPS policy induces a welfare divergence pattern between heterogeneous households. (iii) Compared with the supply-side RPS, the demand-side RPS provides a stronger demand-pull for renewable electricity generation and is more conducive to advancing a just energy transition. This study provides novel insights for policymakers on leveraging RPS and technology innovations to facilitate just energy transitions, contributing to the growing body of literature on navigating uncertainties in energy economics and policy.

Suggested Citation

  • Liu, Yue & Xin, Baogui & Peng, Wei & Santibanez Gonzalez, Ernesto D.R., 2026. "Navigating just energy transitions: A DSGE analysis of renewable portfolio standards and technology innovations," Energy Economics, Elsevier, vol. 160(C).
    • Handle: RePEc:eee:eneeco:v:160:y:2026:i:c:s0140988326003270
    DOI: 10.1016/j.eneco.2026.109448
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