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The Economics of Renewable Energy

Author

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  • Geoffrey Heal

Abstract

Greater use of renewable energy is seen as a key component of any move to combat climate change, and is being aggressively promoted as such by the new U.S. administration and by other governments. Yet there is little economic analysis of renewable energy. This paper surveys what is written and adds to it. The conclusion is that the main renewables face a major problem because of their intermittency (the wind doesn't always blow nor the sun always shine) and that this has not been adequately factored into discussions of their potential. Without new storage technologies that can overcome this intermittency, much of the decarbonization of the economy will have to come from nuclear, carbon capture and storage (CCS) and energy efficiency (geothermal and biofuels can make small contributions). Nuclear and CCS are not without their problems. New energy storage technologies could greatly increase the role of renewables, but none are currently in sight.

Suggested Citation

  • Geoffrey Heal, 2009. "The Economics of Renewable Energy," NBER Working Papers 15081, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:15081
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    File URL: http://www.nber.org/papers/w15081.pdf
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    References listed on IDEAS

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    1. Ian Parry, 2001. "Are Gasoline Taxes in Britain Too High?," Challenge, Taylor & Francis Journals, vol. 44(4), pages 67-81.
    2. Michael Hoel, 2008. "Bush Meets Hotelling: Effects of Improved Renewable Energy Technology on Greenhouse Gas Emissions," CESifo Working Paper Series 2492, CESifo Group Munich.
    3. Robert Hahn & Caroline Cecot, 2009. "The benefits and costs of ethanol: an evaluation of the government’s analysis," Journal of Regulatory Economics, Springer, vol. 35(3), pages 275-295, June.
    4. Ian W. H. Parry & Kenneth A. Small, 2005. "Does Britain or the United States Have the Right Gasoline Tax?," American Economic Review, American Economic Association, vol. 95(4), pages 1276-1289, September.
    5. R. C. D'Arge & K. C. Kogiku, 1973. "Economic Growth and the Environment," Review of Economic Studies, Oxford University Press, vol. 40(1), pages 61-77.
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    Citations

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    Cited by:

    1. Andrade de Sá, Saraly & Daubanes, Julien, 2016. "Limit pricing and the (in)effectiveness of the carbon tax," Journal of Public Economics, Elsevier, vol. 139(C), pages 28-39.
    2. Nick Johnstone & Ivan Ha__i_, 2013. "Increasing the penetration of intermittent renewable energy: innovation in energy storage and grid management," Chapters,in: Handbook on Energy and Climate Change, chapter 6, pages 140-156 Edward Elgar Publishing.
    3. repec:eee:renene:v:113:y:2017:i:c:p:1111-1121 is not listed on IDEAS
    4. Grüne, Lars & Semmler, Willi & Stieler, Marleen, 2015. "Using nonlinear model predictive control for dynamic decision problems in economics," Journal of Economic Dynamics and Control, Elsevier, vol. 60(C), pages 112-133.
    5. repec:eee:rensus:v:80:y:2017:i:c:p:971-989 is not listed on IDEAS
    6. repec:wsi:jicepx:v:02:y:2011:i:02:n:s1793993311000336 is not listed on IDEAS
    7. Apergis, Nicholas & Payne, James E. & Menyah, Kojo & Wolde-Rufael, Yemane, 2010. "On the causal dynamics between emissions, nuclear energy, renewable energy, and economic growth," Ecological Economics, Elsevier, vol. 69(11), pages 2255-2260, September.
    8. Saraly Andrade de Sa & Julien Daubanes, 2014. "Limit-Pricing and the (Un)Effectiveness of the Carbon Tax," Working Papers 2014.07, FAERE - French Association of Environmental and Resource Economists.
    9. Burkart, Christopher S. & Arguea, Nestor M., 2012. "Efficient scale for photovoltaic systems and Florida's solar rebate program," Energy Policy, Elsevier, vol. 48(C), pages 470-478.
    10. Gorkemli Kazar & Arthur Kazar, 2014. "The Renewable Energy Production-Economic Development Nexus," International Journal of Energy Economics and Policy, Econjournals, vol. 4(2), pages 312-319.
    11. Marianne Haug, 2011. "Clean energy and international oil," Oxford Review of Economic Policy, Oxford University Press, vol. 27(1), pages 92-116, Spring.
    12. Thiam Hee Ng, . "Bond Financing for Renewable Energy in Asia," Chapters, Economic Research Institute for ASEAN and East Asia (ERIA).

    More about this item

    JEL classification:

    • Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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