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Factors Affecting the Rise of Renewable Energy in the U.S.: Concern over Environmental Quality or Rising Unemployment?

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  • Adrienne M. Ohler

Abstract

This paper studies the development of renewable energy (RE) in the U.S. by examining the capacity to generate electricity from renewable sources. RE capacity exhibits a U-shaped relationship with per capita income, similar to other metrics for environmental quality (EQ). To explain this phenomenon, I consider several of the environmental Kuznets curve theories that describe the relationship between income and environmental quality (Y-EQ), including evolving property rights, increased demand for improved EQ, and changing economic composition. The results fail to provide support for the Y-EQ theories. I further consider the alternative hypothesis that increases in unemployment lead to increases in relative RE capacity, suggesting that promoting RE projects as a potential job creator is one of the main drivers of RE projects. The results imply that lagged unemployment is a significant predictor of relative RE capacity, particularly for states with a large manufacturing share of GDP.

Suggested Citation

  • Adrienne M. Ohler, 2015. "Factors Affecting the Rise of Renewable Energy in the U.S.: Concern over Environmental Quality or Rising Unemployment?," The Energy Journal, , vol. 36(2), pages 97-116, April.
    • Handle: RePEc:sae:enejou:v:36:y:2015:i:2:p:97-116
    DOI: 10.5547/01956574.36.2.5
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    References listed on IDEAS

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