IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v14y2021i11p3319-d569471.html
   My bibliography  Save this article

Assessing the Economic and Environmental Impacts of Alternative Renewable Portfolio Standards: Winners and Losers

Author

Listed:
  • Jamal Mamkhezri

    (Department of Economics, Applied Statistics & International Business, New Mexico State University, Las Cruces, NM 88003, USA)

  • Leonard A. Malczynski

    (Anderson School of Management, University of New Mexico, Albuquerque, NM 87131, USA)

  • Janie M. Chermak

    (Department of Economics, University of New Mexico, Albuquerque, NM 87131, USA)

Abstract

State-mandated renewable portfolio standards affect substantial portions of the total U.S. electricity supply. Renewable portfolio standards are environmentally motivated policies, yet they have the potential to greatly impact economy. There is not an agreement in the literature on the impact of renewable portfolio standards policies on regional economies, especially on job creation. By integrating various methodologies including econometrics, geographic information system, and input–output analysis into a unique system dynamics model, this paper estimates the economic and environmental impacts of various renewable portfolio standards scenarios in the state of New Mexico, located in Southwestern U.S. The state is endowed with traditional fossil fuel resources and substantial renewable energy potential. In this work we estimated and compared the economic and environmental tradeoffs at the county level under three renewable portfolio standards: New Mexico’s original standard of 20% renewables, the recently adopted 100% renewables standard, and a reduced renewable standard of 10%. The final one would be a return to a more traditional generation profile. We found that while the 20% standard has the highest market-based economic impact on the state as a whole, it is not significantly different from other scenarios. However, when environmental impacts are included, the 100% standard yields the highest value. In addition, while the state level economic impacts across the three scenarios are not significantly different, the county-level impacts are substantial. This is especially important for a state like New Mexico, which has a high reliance on energy for economic development. A higher renewable portfolio standard appears to be an economic tool to stimulate targeted areas’ economic growth. These results have policy implications.

Suggested Citation

  • Jamal Mamkhezri & Leonard A. Malczynski & Janie M. Chermak, 2021. "Assessing the Economic and Environmental Impacts of Alternative Renewable Portfolio Standards: Winners and Losers," Energies, MDPI, vol. 14(11), pages 1-23, June.
    • Handle: RePEc:gam:jeners:v:14:y:2021:i:11:p:3319-:d:569471
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/14/11/3319/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1996-1073/14/11/3319/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Heard, B.P. & Brook, B.W. & Wigley, T.M.L. & Bradshaw, C.J.A., 2017. "Burden of proof: A comprehensive review of the feasibility of 100% renewable-electricity systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 76(C), pages 1122-1133.
    2. Sahan T. M. Dissanayake & Amy W. Ando, 2014. "Valuing Grassland Restoration: Proximity to Substitutes and Trade-offs among Conservation Attributes," Land Economics, University of Wisconsin Press, vol. 90(2), pages 237-259.
    3. Alex Hollingsworth & Ivan Rudik, 2019. "External Impacts of Local Energy Policy: The Case of Renewable Portfolio Standards," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 6(1), pages 187-213.
    4. Jamal Mamkhezri, Jennifer A. Thacher, and Janie M. Chermak, 2020. "Consumer Preferences for Solar Energy: A Choice Experiment Study," The Energy Journal, International Association for Energy Economics, vol. 0(Number 5), pages `57-184.
    5. Dev Millstein & Ryan Wiser & Mark Bolinger & Galen Barbose, 2017. "The climate and air-quality benefits of wind and solar power in the United States," Nature Energy, Nature, vol. 2(9), pages 1-10, September.
    6. Palmer, Karen & Burtraw, Dallas, 2005. "Cost-effectiveness of renewable electricity policies," Energy Economics, Elsevier, vol. 27(6), pages 873-894, November.
    7. Qudrat-Ullah, Hassan & Seong, Baek Seo, 2010. "How to do structural validity of a system dynamics type simulation model: The case of an energy policy model," Energy Policy, Elsevier, vol. 38(5), pages 2216-2224, May.
    8. Y Olaya & I Dyner, 2005. "Modelling for policy assessment in the natural gas industry," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 56(10), pages 1122-1131, October.
    9. Kevin Novan, 2015. "Valuing the Wind: Renewable Energy Policies and Air Pollution Avoided," American Economic Journal: Economic Policy, American Economic Association, vol. 7(3), pages 291-326, August.
    10. Sanya Carley & Lincoln L. Davies & David B. Spence & Nikolaos Zirogiannis, 2018. "Empirical evaluation of the stringency and design of renewable portfolio standards," Nature Energy, Nature, vol. 3(9), pages 754-763, September.
    11. Zhou, Shan & Solomon, Barry D., 2020. "Do renewable portfolio standards in the United States stunt renewable electricity development beyond mandatory targets?," Energy Policy, Elsevier, vol. 140(C).
    12. Upton, Gregory B. & Snyder, Brian F., 2017. "Funding renewable energy: An analysis of renewable portfolio standards," Energy Economics, Elsevier, vol. 66(C), pages 205-216.
    13. Harrison Fell & Daniel T. Kaffine & Kevin Novan, 2021. "Emissions, Transmission, and the Environmental Value of Renewable Energy," American Economic Journal: Economic Policy, American Economic Association, vol. 13(2), pages 241-272, May.
    14. Wiser, Ryan & Bolinger, Mark & Heath, Garvin & Keyser, David & Lantz, Eric & Macknick, Jordan & Mai, Trieu & Millstein, Dev, 2016. "Long-term implications of sustained wind power growth in the United States: Potential benefits and secondary impacts," Applied Energy, Elsevier, vol. 179(C), pages 146-158.
    15. Severin Borenstein, 2012. "The Private and Public Economics of Renewable Electricity Generation," Journal of Economic Perspectives, American Economic Association, vol. 26(1), pages 67-92, Winter.
    16. Barbose, Galen & Wiser, Ryan & Heeter, Jenny & Mai, Trieu & Bird, Lori & Bolinger, Mark & Carpenter, Alberta & Heath, Garvin & Keyser, David & Macknick, Jordan & Mills, Andrew & Millstein, Dev, 2016. "A retrospective analysis of benefits and impacts of U.S. renewable portfolio standards," Energy Policy, Elsevier, vol. 96(C), pages 645-660.
    17. Ying, Zhou & Xin-gang, Zhao & Zhen, Wang, 2020. "Demand side incentive under renewable portfolio standards: A system dynamics analysis," Energy Policy, Elsevier, vol. 144(C).
    18. Jamal Mamkhezri & Jennifer A. Thacher & Janie M. Chermak & Robert P. Berrens, 2020. "Does the solemn oath lower WTP responses in a discrete choice experiment application to solar energy?," Journal of Environmental Economics and Policy, Taylor & Francis Journals, vol. 9(4), pages 447-473, October.
    19. Slattery, Michael C. & Lantz, Eric & Johnson, Becky L., 2011. "State and local economic impacts from wind energy projects: Texas case study," Energy Policy, Elsevier, vol. 39(12), pages 7930-7940.
    20. Qudrat-Ullah, Hassan, 2013. "Understanding the dynamics of electricity generation capacity in Canada: A system dynamics approach," Energy, Elsevier, vol. 59(C), pages 285-294.
    21. Sovacool, Benjamin K., 2009. "Contextualizing avian mortality: A preliminary appraisal of bird and bat fatalities from wind, fossil-fuel, and nuclear electricity," Energy Policy, Elsevier, vol. 37(6), pages 2241-2248, June.
    22. Considine, Timothy J. & Manderson, Edward J.M., 2015. "The cost of solar-centric renewable portfolio standards and reducing coal power generation using Arizona as a case study," Energy Economics, Elsevier, vol. 49(C), pages 402-419.
    23. McCubbin, Donald & Sovacool, Benjamin K., 2013. "Quantifying the health and environmental benefits of wind power to natural gas," Energy Policy, Elsevier, vol. 53(C), pages 429-441.
    24. Walston, Leroy J. & Rollins, Katherine E. & LaGory, Kirk E. & Smith, Karen P. & Meyers, Stephanie A., 2016. "A preliminary assessment of avian mortality at utility-scale solar energy facilities in the United States," Renewable Energy, Elsevier, vol. 92(C), pages 405-414.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. -, 2023. "Foreign Direct Investment in Latin America and the Caribbean 2023," La Inversión Extranjera Directa en América Latina y el Caribe, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 48979 edited by Eclac, May.
    2. Jamal Mamkhezri & Gregory L. Torell, 2022. "Assessing the Impact of Exceptional Drought on Emissions and Electricity Generation: The Case of Texas," The Energy Journal, , vol. 43(4), pages 159-178, May.
    3. Yang Tang & Yifeng Liu & Weiqiang Huo & Meng Chen & Shilong Ye & Lei Cheng, 2023. "Optimal Allocation Scheme of Renewable Energy Consumption Responsibility Weight under Renewable Portfolio Standards: An Integrated Evolutionary Game and Stochastic Optimization Approach," Energies, MDPI, vol. 16(7), pages 1-22, March.
    4. Hui Dai & Jamal Mamkhezri & Noman Arshed & Anam Javaid & Sultan Salem & Yousaf Ali Khan, 2022. "Role of Energy Mix in Determining Climate Change Vulnerability in G7 Countries," Sustainability, MDPI, vol. 14(4), pages 1-15, February.
    5. Shangjia Wang & Wenhui Zhao & Shuwen Fan & Lei Xue & Zijuan Huang & Zhigang Liu, 2022. "Is the Renewable Portfolio Standard in China Effective? Research on RPS Allocation Efficiency in Chinese Provinces Based on the Zero-Sum DEA Model," Energies, MDPI, vol. 15(11), pages 1-18, May.
    6. Minglin Wang & Shaolong Zeng & Yunzhe Wang & Zhengxia He, 2022. "Does Clean Energy Use Have Threshold Effects on Economic Development? A Case of Theoretical and Empirical Analyses from China," IJERPH, MDPI, vol. 19(15), pages 1-18, August.
    7. Mohsen Khezri & Mohammad Sharif Karimi & Jamal Mamkhezri & Reza Ghazal & Larry Blank, 2022. "Assessing the Impact of Selected Determinants on Renewable Energy Sources in the Electricity Mix: The Case of ASEAN Countries," Energies, MDPI, vol. 15(13), pages 1-15, June.
    8. Zeng, Lijun & Du, Wenjing & Zhao, Laijun & Zhan, Yanhong, 2023. "An inter-provincial transfer fee model under renewable portfolio standard policy," Energy, Elsevier, vol. 277(C).
    9. Yang Yang & Libo Lan & Zhuo Hao & Jianyou Zhao & Geng Luo & Pei Fu & Yisong Chen, 2022. "Life Cycle Prediction Assessment of Battery Electrical Vehicles with Special Focus on Different Lithium-Ion Power Batteries in China," Energies, MDPI, vol. 15(15), pages 1-23, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zerrahn, Alexander, 2017. "Wind Power and Externalities," Ecological Economics, Elsevier, vol. 141(C), pages 245-260.
    2. Rivera, Nathaly M. & Ruiz-Tagle, J. Cristobal & Spiller, Elisheba, 2024. "The health benefits of solar power generation: Evidence from Chile," Journal of Environmental Economics and Management, Elsevier, vol. 126(C).
    3. Susana Silva & Erika Laranjeira & Isabel Soares, 2021. "Health Benefits from Renewable Electricity Sources: A Review," Energies, MDPI, vol. 14(20), pages 1-17, October.
    4. Xu, Jiuping & Yang, Guocan & Wang, Fengjuan & Shu, Kejing, 2022. "A provincial renewable portfolio standards-based distribution strategy for both power plant and user: A case study from Guangdong, China," Energy Policy, Elsevier, vol. 165(C).
    5. Wiser, Ryan & Millstein, Dev & Mai, Trieu & Macknick, Jordan & Carpenter, Alberta & Cohen, Stuart & Cole, Wesley & Frew, Bethany & Heath, Garvin, 2016. "The environmental and public health benefits of achieving high penetrations of solar energy in the United States," Energy, Elsevier, vol. 113(C), pages 472-486.
    6. Barry D. Solomon & Shan Zhou, 2021. "Renewable Portfolio Standards: Do Voluntary Goals vs. Mandatory Standards Make a Difference?," Review of Policy Research, Policy Studies Organization, vol. 38(2), pages 146-163, March.
    7. Jenniches, Simon & Worrell, Ernst & Fumagalli, Elena, 2019. "Regional economic and environmental impacts of wind power developments: A case study of a German region," Energy Policy, Elsevier, vol. 132(C), pages 499-514.
    8. Gugler, Klaus & Haxhimusa, Adhurim & Liebensteiner, Mario, 2023. "Carbon pricing and emissions: Causal effects of Britain's carbon tax," Energy Economics, Elsevier, vol. 121(C).
    9. Rountree, Valerie, 2019. "Nevada's experience with the Renewable Portfolio Standard," Energy Policy, Elsevier, vol. 129(C), pages 279-291.
    10. Sun, Jie & Zhou, P. & Wen, Wen, 2022. "Assessing the regional adaptive capacity to renewable portfolio standard policy in China," Energy Policy, Elsevier, vol. 162(C).
    11. Michaela Makešová & Michaela Valentová, 2021. "The Concept of Multiple Impacts of Renewable Energy Sources: A Critical Review," Energies, MDPI, vol. 14(11), pages 1-21, May.
    12. Wiser, Ryan & Bolinger, Mark & Heath, Garvin & Keyser, David & Lantz, Eric & Macknick, Jordan & Mai, Trieu & Millstein, Dev, 2016. "Long-term implications of sustained wind power growth in the United States: Potential benefits and secondary impacts," Applied Energy, Elsevier, vol. 179(C), pages 146-158.
    13. Zhou, Shan & Solomon, Barry D., 2020. "Do renewable portfolio standards in the United States stunt renewable electricity development beyond mandatory targets?," Energy Policy, Elsevier, vol. 140(C).
    14. Hitaj, Claudia, 2015. "Location matters: The impact of renewable power on transmission congestion and emissions," Energy Policy, Elsevier, vol. 86(C), pages 1-16.
    15. Lee, Kangoh, 2023. "Renewable portfolio standards and electricity prices," Energy Economics, Elsevier, vol. 126(C).
    16. Lee, Jonathan M. & Howard, Gregory, 2021. "The impact of technical efficiency, innovation, and climate policy on the economic viability of renewable electricity generation," Energy Economics, Elsevier, vol. 100(C).
    17. Ogunrinde, Olawale & Shittu, Ekundayo, 2023. "Efficiency and productivity of renewable energy technologies: Evidence from U.S. investor-owned utilities across regional markets," Utilities Policy, Elsevier, vol. 82(C).
    18. Ying, Zhou & Xin-gang, Zhao & Zhen, Wang, 2020. "Demand side incentive under renewable portfolio standards: A system dynamics analysis," Energy Policy, Elsevier, vol. 144(C).
    19. Dehghan, Hamed & Amin-Naseri, Mohammad Reza & Nahavandi, Nasim, 2021. "A system dynamics model to analyze future electricity supply and demand in Iran under alternative pricing policies," Utilities Policy, Elsevier, vol. 69(C).
    20. Morris, Adele C. & Nivola, Pietro S. & Schultze, Charles L., 2012. "Clean energy: Revisiting the challenges of industrial policy," Energy Economics, Elsevier, vol. 34(S1), pages 34-42.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jeners:v:14:y:2021:i:11:p:3319-:d:569471. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.