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Cost-Effectiveness of Renewable Electricity Policies

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  • Burtraw, Dallas

    (Resources for the Future)

  • Palmer, Karen

    (Resources for the Future)

Abstract

We analyze policies to promote renewable sources of electricity. A renewable portfolio standard raises electricity prices and primarily reduces gas-fired generation. A “knee” of the cost curve exists between 15% and 20% goals for 2020 in our central case, and higher natural gas prices lower the cost of greater reliance on renewables. A renewable energy production tax credit lowers electricity price at the expense of taxpayers and thus limits its effectiveness in reducing carbon emissions; it also is less costeffective at increasing renewables than a portfolio standard. Neither policy is as cost-effective as a capand-trade policy for achieving carbon emissions reductions.

Suggested Citation

  • Burtraw, Dallas & Palmer, Karen, 2005. "Cost-Effectiveness of Renewable Electricity Policies," RFF Working Paper Series dp-05-01, Resources for the Future.
  • Handle: RePEc:rff:dpaper:dp-05-01
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    References listed on IDEAS

    as
    1. McVeigh, James & Burtraw, Dallas & Darmstadter, Joel & Palmer, Karen L., 1999. "Winner, Loser, or Innocent Victim? Has Renewable Energy Performed As Expected?," Discussion Papers 10627, Resources for the Future.
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    More about this item

    Keywords

    renewable energy; electricity; renewable portfolio standard; carbon dioxide;
    All these keywords.

    JEL classification:

    • 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
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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