the renewables portfolio standard in texas an early assessment texas has rapidly emerged as one of the leading wind power markets in the united states this development can be largely traced to a well designed and carefully implemented renewables portfolio standard rps the rps is a new policy mechanism that has received increasing attention as an attractive approach to support renewable power generation though replacing existing renewable energy policies with an as of yet untested approach in the rps is risky early experience from texas suggests that an rps can effectively spur renewables development and encourage competition among renewable energy producers initial rps targets in texas were well exceeded by the end of 2001 with 915 mw of wind installed in that year alone rps compliance costs appear negligible with new wind projects reportedly contracted for well under 3 us cent k wh in part as a result of a 1 7 us cent kwh production tax credit an outstanding wind resource and an rps that is sizable enough to drive project economies of scale obliged retail suppliers have been willing to enter into long term contracts with renewable generators reducing important risks for both the developer and the retail supplier finally the country s first comprehensive renewable energy certificate program has been put into place to monitor and track rps compliance c 2002 published by elsevier science ltd less

are policy incentives for solar power effective evidence from residential installations in the northeast abstract state incentives for solar power have grown significantly in the past several years this paper examines the effectiveness of policy incentives to increase residential solar photovoltaic pv capacity we use county level panel data and control for demographic characteristics solar resources and pro environmental preferences results show that among financial incentives rebates have the most impact with an additional 1 per watt rebate increasing annual pv capacity additions by close to 50 factors that affect financial returns to solar pv such as electricity price and solar insolation are also found to be significant results also point to a significant positive relationship between hybrid vehicle sales and residential pv capacity growth indicating the importance of pro environmental preferences as a predictor of solar pv demand back of the envelope calculations suggest that the cost of carbon mitigation through rebates is around 184 per ton of co2

using a policy mix for pollution control a review of economic literature this article provides a review of economic studies analyzing the use of multiple policies a socalled policy mix to cope with single pollution problems to guide and structure the review an analytical framework is developed and applied the framework integrates transaction costs into the analysis of pollution problems and policies to overcome them moreover it understands a pollution externality not only as a market failure but more generally as the failure of private governance structures based on this insight two rationales for using a policy mix are identified first a policy mix may help to correct for multiple reinforcing failures of private governance structures such as pollution externalities and technological spillovers second a policy mix can be employed if the implementation of single first best policies brings about high transaction costs e g when marginal pollution damages are heterogeneous or polluters are unlikely to comply with the policy for each rationale the relevant literature is presented based on the review avenues for future research are identified

the unbalanced uruguay round outcome the new areas in future wto negotiations the uruguay round involved a grand north south bargain the north reduced import barriers particularly in textiles and agriculture the south adopted new domestic regulations in such areas as services and intellectual property changes that would lead to increased purchases from the north in mercantilist economics apples for apples imports for imports in real economics apples for oranges the authors argue that while the north s reduction of import barriers benefits both the north and the south the new domestic regulations adopted by countries of the south could prove costly to those countries to begin with the regulations will be expensive to implement and while the cost side of their impact is secured by a legal obligation in the case of intellectual property rights for example the cost is higher prices for patented goods the benefits side is not so secured

weighing the costs and benefits of state renewables portfolio standards in the united states a comparative analysis of state level policy impact projections abstract state renewables portfolio standards rps have emerged as one of the most important policy drivers of renewable energy capacity expansion in the u s as rps policies have been proposed or adopted in an increasing number of states a growing number of studies have attempted to quantify the potential impacts of these policies focusing primarily on cost impacts but sometimes also estimating macroeconomic risk reduction and environmental effects this article synthesizes and analyzes the results and methodologies of 31 distinct state or utility level rps cost impact analyses completed since 1998 together these studies model proposed or adopted rps policies in 20 different states we highlight the key findings of these studies on the projected costs of state rps policies examine the sensitivity of projected costs to model assumptions evaluate the reasonableness of key input assumptions and suggest possible areas of improvement for future rps analyses we conclude that while there is considerable uncertainty in the study results the majority of the studies project modest cost impacts seventy percent of the state rps cost studies project retail electricity rate increases of no greater than 1 nonetheless there is considerable room for improving the analytic methods and therefore accuracy of these estimates

wind power price trends in the united states struggling to remain competitive in the face of strong growth the amount of wind power capacity being installed globally is surging with the united states the world leader in terms of annual market share for three years running 2005 2007 the rapidly growing market for wind has been a double edged sword however as the resulting supply demand imbalance in wind turbines along with the rising cost of materials and weakness in the u s dollar has put upward pressure on wind turbine costs and ultimately wind power prices two mitigating factors reductions in the cost of equity provided to wind projects and improvements in project level capacity factors have helped to relieve some of the upward pressure on wind power prices over the last few years because neither of these two factors can be relied upon to further cushion the blow going forward policymakers should recognize that continued financial support may be necessary to sustain the wind sector at its current pace of development at least in the near term though this article emphasizes developments in the u s market for wind power those trends are similar to and hold implications for the worldwide wind power market

taxing variable cost environmental regulation as industrial policy abstract conventional wisdom has it that a country that enacts strict environmental regulations will place its firms at a competitive disadvantage this view has been challenged recently some commentators argue that stricter regulation will enhance domestic competitiveness strict regulations induce innovation we evaluate this argument in a strategic trade model in very special cases a strengthening of regulation may result in a shift of profits from foreign to domestic firms this is not a general result however environmental regulation should of course be imposed to control externalities but it is unlikely that it will serve to generate industrial advantage

consequences of lower oil prices and stranded assets for russia s sustainable fiscal stance abstract despite substantial oil and gas revenue russia s fiscal stance is unsustainable under our benchmark assumptions the permanent income rule requires a permanent tightening of the fiscal stance by 4 6 points of gdp delaying it by a decade implies that the fiscal stance needs to be tightened by a further 0 9 point this benchmark optimal policy ensures that depletion of oil and gas wealth is matched by an equal increase in above ground financial wealth its merits are highlighted by comparing it with the tougher alternative of the bird in hand rule and with projecting the current fiscal stance if oil and gas revenue rises by a half due to higher prices or more discoveries the fiscal stance needs to be tightened by only 3 2 points of gdp however if a large chunk of oil and gas has to be kept in the soil to meet international agreements to keep global warming below 2 c the permanent transfer drops to 2 0 of gdp and the fiscal stance needs to be tightened by 5 5 points of gdp

cost benefit analysis of various california renewable portfolio standard targets is a 33 rps optimal abstract renewable portfolio standards rpss require a certain fraction of the electricity generated for a given region be produced from renewable resources california s rps mandates that by 2020 33 of the electricity sold in the state must be generated from renewables such mandates have important implications for the electricity sector as well as for the whole society in this paper we estimate the costs and benefits of varying 2020 california rps targets on electricity prices greenhouse gas ghg emissions criteria pollutant emissions the electricity generation mix the labor market renewable investment decisions and social welfare we have extended the rps calculator model developed by energy and environmental economics e3 inc to account for distributions of fuel and generation costs to incorporate demand functions and to estimate the effects of rps targets on ghg emissions criteria pollutant emissions and employment the results of our modeling provide the following policy insights 1 the average 2020 electricity price increases as the rps target rises with values ranging between 0 152 and 0 175 kw h 2008 dollars for the 20 rps to 50 rps respectively 2 the 33 and 50 rps targets decrease the ghg emissions by about 17 6 and 35 8 million metric tons of carbon dioxide equivalent mmtco2e relative to the 20 rps 3 the ghg emission reduction costs of the rps options are high 71 94 per ton relative to results from policy options other than rps or prices that are common in the carbon markets and 4 a lower target e g a 27 rps provides higher social welfare than the 33 rps mandate under low and moderate co2 social costs lower than 35 ton while a higher rps target e g 50 is more beneficial when using high co2 social costs or rapid renewable technology diffusion however under all studied scenarios the mandated 33 rps for california would not provide the best cost benefit values among the possible targets and would not maximize the net social benefit objective

financial impact of energy efficiency under a federal combined efficiency and renewable electricity standard case study of a kansas super utility abstract historically local state and federal policies have separately promoted the generation of electricity from renewable technologies and the pursuit of energy efficiency to help mitigate the detrimental effects of global climate change and foster energy independence federal policymakers are currently considering and several states have enacted a combined efficiency and renewable electricity standard which proponents argue provides a comprehensive approach with greater flexibility and at lower cost we examine the financial impacts on various stakeholders from alternative compliance strategies with a combined efficiency and renewable electricity standard ceres using a case study approach for utilities in kansas our results suggest that an investor owned utility is likely to pursue the most lucrative compliance strategy for its shareholders one that under invests in energy efficiency resources if a business model for energy efficiency inclusive of both a lost fixed cost recovery mechanism and a shareholder incentive mechanism is implemented our analysis indicates that an investor owned utility would be more willing to pursue energy efficiency as a lower cost ceres compliance strategy absent implementing such a regulatory mechanism separate energy efficiency and renewable portfolio standards would improve the likelihood of reducing reliance on fossil fuels at least cost through the increased pursuit of energy efficiency

five hypotheses concerning the fate of the singapore issues in the doha round at the cancun ministerial conference the members of the world trade organization wto disagreed on whether to launch negotiations on multilateral disciplines concerning the four areas of government policy collectively known as the singapore issues this amounted to a decision not to expand the wto s boundaries along these dimensions in this paper five hypotheses concerning the treatment of the singapore issues by the wto s membership are described and assessed the implications of this assessment for the likelihood that at some future date similar proposals can be successfully advanced in the multilateral trade arena are also discussed

environmental constituent interest green electricity policies and legislative voting abstract research in political economy has traditionally sought to disentangle the effects of legislative ideology and constituent interest in explaining policy decisions frequently proxy variables are used to measure constituent interest however these measures do not adequately reflect true constituent interest which is based upon the costs and benefits of the policies under consideration incorporating the scope of the policies using haiku a detailed model of the us electricity sector and taf an integrated assessment model of pollution pathways and valuation i construct economic measures of constituent interest at the state level as well as for federal policy i then use these measures to analyze state adoption of more stringent green electricity policies and congressional roll call voting on federal environmental policy previous studies that use proxy measures of constituent interest typically find that the legislator ideology matters more while my study shows that both ideology and constituent interest are significant factors

the value of trade agreements in the presence of political pressures an argument often heard in favor of trade agreements is that by committing to free trade a government can credibly distance itself from domestic lobbies but several existing models of endogenous protection suggest that governments have no interest in foreclosing interest group pressures since governments derive rents from the political process we develop a small country model in which factors are sector specific in the short run but mobile in the long run we show that in this setting a government may be worse off in the political equilibrium than under commitment to free trade and hence it may value a trade agreement

firm incentives to promote technological change in pollution control reply abstract the process of technological change in pollution control is broken into three basic steps innovation diffusion and optimal agency response firm incentives to promote these steps are then examined under five regulatory regimes direct controls emission subsidies emission taxes free marketable permits and auctioned marketable permits on a relative basis emission taxes and auctioned permits provide the highest firm incentives to promote technological change at times free permits generate lower incentives direct controls which are common regulatory tools usually provide the lowest relative firm incentives to promote technological change

agricultural tariffs or subsidies which are more important for developing economies this article assesses the impact of the world price depressing effect of agricultural subsidies and border protection in organization for economic co operation and development oecd countries on developing economies exports imports and welfare developing economy exporters are likely to benefit from reductions in such subsidies and trade barriers whereas net importers may lose as world prices rise a simple partial equilibrium model of global trade in commodities that benefit from domestic support or export subsidies is developed to estimate the relevant elasticities simulation results suggest that a 50 percent reduction in border protection will have a much larger positive impact on developing economies exports and welfare than a 50 percent reduction in agricultural subsidies although there is significant heterogeneity across developing economies the results suggest that efforts in the doha round of world trade organization wto negotiations should be directed at substantially reducing border protection

greener more integrated and less volatile a quantile regression analysis of italian wholesale electricity prices abstract this paper provides estimates of quantile regression models of the relationship between italian day ahead electricity prices the supply of renewables and the inception of a new cable sapei linking sardinia with the italian peninsula in the 2006 2015 time window the results confirm the merit order effects detected in the existing literature both for photovoltaics and wind power more strongly in market conditions characterised by moderately low price levels and with some implied increase in volatility the new cable has apparently challenged the ability of power generating companies to extract value through price spikes has mitigated volatility and its effects have been complementary with those of renewables effects from photovoltaics are more sensitive to robustness checks differences across zonal markets are nonetheless detected

non renewable and intermittent renewable energy sources friends and foes abstract this paper studies the links between non renewable and intermittent renewable energy sources in the production of electricity using u s state level data from 1998 to 2015 we find that the relationship between the price of natural gas and investments in solar and wind capacity is non linear and can be represented by an inverted u shape hence for relatively low natural gas prices the two modes of production are substitutes after a price threshold is reached the two are complementary a theoretical explanation argues that this stylized fact is the result of a trade off between two characteristics of these modes of production the high degree of flexibility of electricity production using natural gas as an input and the low marginal cost of renewable energy sources

innovations and the economics of new technology spreading within and across users gaps and way forward r d subsidies are often considered the main policy tool to stimulate the competitiveness and the innovativeness of firms this is especially true for innovations designed to produce greener products or cleaner and more energy efficient technologies however a consistent literature has now shown that even when a clean or a cost reducing technology is ready available in the market its spreading within intra or across inter households or firms takes several years and in some cases decades therefore it is not only important to generate innovations via investments in r d but it is also important that such innovations are adopted and used by firms this paper briefly illustrates the main theoretical approaches to the analysis of the factors leading to inter firm diffusion and emphasise the existing gap led by the paucity of literature on intra firm diffusion a final section briefly discusses some methodological issues surrounding the diffusion of consumer non durable technologies within and across households and how ad hoc models can be used to test the validity of environmental policies

implementation and imbalance dealing with hangover from the uruguay round the uruguay round agreements impose bound obligations to implement but provide only unbound promises of assistance is there a legal solution within the wto legal system i e can implementation assistance be made a legal obligation the author concludes that the doha negotiations on trade facilitation and on aid for trade demonstrate that such a legal arrangement cannot be constructed this is not however a problem the international community has provided extensive trade related assistance through bilateral and multilateral development agencies regarding the overall uruguay round imbalance developing countries gave more than they got failure of the international community to acknowledge that the imbalance stems in major part from the wto agreement on intellectual property trips has retarded a general making up

evaluation of property tax bonus to promote solar thermal systems in andalusia spain abstract this paper evaluates the effects of a property tax bonus to promote the installation of solar thermal energy systems in buildings in andalusia southern spain the propensity score matching methodology is used the treatment group consists of municipalities of andalusia that established property tax bonuses in their municipalities in 2010 the control group consists of municipalities that did not the response variable measures the number of new square meters of solar thermal systems installed in 2010 the analysis leads to the conclusion that municipalities that established a property tax bonus had installed on average 102 245 to 122 389 square meters more these results indicate that the percentage increase in squares meters installed in municipalities which adopted the tax bonus promotion ranged from 70 74 to 98 38 these percentages were lower for rural municipalities 49 00 to 77 06

accounting for fuel price risk when comparing renewable to gas fired generation the role of forward natural gas prices abstract unlike natural gas fired generation renewable generation e g from wind solar and geothermal power is largely immune to fuel price risk if ratepayers are rational and value long term price stability then contrary to common practice any comparison of the levelized cost of renewable to gas fired generation should be based on a hedged gas price input rather than an uncertain gas price forecast this paper compares natural gas prices that can be locked in through futures swaps and physical supply contracts to contemporaneous long term forecasts of spot gas prices we find that from 2000 to 2003 forward gas prices for terms of 2 10 years have been considerably higher than most contemporaneous long term gas price forecasts this difference is striking and implies that comparisons between renewable and gas fired generation based on these forecasts over this period have arguably yielded results that are biased in favor of gas fired generation

can deployment of renewable energy put downward pressure on natural gas prices abstract high and volatile natural gas prices have increasingly led to calls for investments in renewable energy one line of argument is that deployment of these resources may lead to reductions in the demand for and price of natural gas many recent us based modeling studies have demonstrated that this effect could provide significant consumer savings in this article we evaluate these studies and benchmark their findings against economic theory other modeling results and a limited empirical literature we find that many uncertainties remain regarding the absolute magnitude of this effect and that the reduction in natural gas prices may not represent an increase in aggregate economic wealth nonetheless we conclude that many of the studies of the impact of renewable energy on natural gas prices appear to have represented this effect within reason given current knowledge these studies specifically suggest that a 1 reduction in us natural gas demand could lead to long term average wellhead price reductions of 0 8 2 and that each megawatt hour of renewable energy may benefit natural gas consumers to the tune of at least 7 5 20

electricity in europe exiting fossil fuels there are many options for generating electricity with low carbon emissions and the elec trification of heat and transport can decarbonize energy use across the economy this places the power sector at the forefront of any move away from fossil fuels even though fossil fuelled generators are more dependable and flexible than nuclear reactors or intermittent renewables and vital for the second by second balancing of supply and demand renewables tend to supplement rather than replace fos sil capacity although output from fossil fuelled stations will fall and some will have to retire to avoid depressing wholesale power prices at times of low demand and high renewable output prices can turn negative but electricity storage long distance interconnection and flexible demand may develop to absorb any excess generation simulations for great britain show that while coal may be eliminated from the mix within a decade natural gas has a long term role in stations with or without carbon cap ture and storage depending on its cost and the price of carbon

carbon trading in the policy mix the kyoto protocol is stimulating the development of emissions trading schemes at the national and international levels these are being introduced alongside existing policy instruments such as carbon taxes and negotiated agreements leading to complex problems of policy interaction but the topic of policy interaction remains under researched this paper aims to improve understanding of such interactions by examining the conditions under which a cap and trade scheme for carbon dioxide emissions may usefully coexist with carbon energy taxes support mechanisms for renewable electricity and policies to promote energy efficiency the paper argues that each of these instrument combinations may be acceptable provided they contribute to either improving the static or dynamic efficiency of the trading scheme or delivering other valued policy objectives but since the coexisting instruments may raise overall abatement costs while contributing nothing further to emission reductions the objectives and trade offs within the policy mix must be explicit

coherence and the wto coherence between the wto and the bretton woods institutions a formal wto objective has achieved some minor goals but has been expensive in terms of direct costs and inefficiencies in policy making and policy debate the so called integrated framework has achieved relatively little and aid for trade has yet to be fully established there is little role for the wto in development and aid policy other than its traditional job of facilitating trade growth and so its role in aid for trade is unclear coherence especially when interpreted as allowing developing countries to avoid trade liberalization in the name of development has confused and weakened the doha round of wto negotiations

fiscal and economic impacts of state incentives for wind energy development in the western united states abstract wind energy production in the united states has seen significant growth over recent years due in large part to the state and federal policies designed to encourage wind energy development this research focuses on measures undertaken at the state level in the western region of the united states several of these states have implemented legislation in the form of financial incentives and renewable portfolio standards to support wind development it is shown that state tax incentives and physical drivers have a significant positive impact on wind energy growth there has been concern however about the fiscal impacts of financial incentives on state tax revenues as a result some states have removed tax incentives a recent example is the removal of sales and use tax rebates for wind producers in idaho however the removal of such incentives results in a net loss of tax revenues as well as negative economic impacts by hindering the development of wind energy projects it is shown that attendant economic benefits from wind development results in significant positive fiscal impacts by increasing tax revenues for state and local governments the increased tax revenues begin with the pre construction and construction phases of such projects and continue to accrue throughout the life of project operations until eventual decommissioning the removal of this incentive in idaho results in a net reduction in tax revenues as well as the loss of significant economic benefits in terms of employment incomes and total output for the state

the impact of environmental policy instruments on innovation a review of energy and automotive industry studies various types of policy instruments have been implemented to reduce local and global emissions but the impact on innovation of different instruments has received less attention this paper reviews empirical studies of the innovation impact of four main types of policy instruments in two high emitting sectors the conclusions are threefold 1 policy plays a key role for the development and diffusion of environmental innovation in the studied sectors 2 different types of instruments promote different types of innovations general economic instruments has primarily encouraged incremental innovation general regulatory instruments has enforced improvements based on modular innovation and technology specific instruments appears to have been needed to support the development and deployment of radically new technologies 3 all types of policy instruments face challenges in design and implementation understanding the selection impact of the chosen instruments implementing increasing stringency levels committing to an appropriate scale and safeguarding policy stability

twenty first century the century of coal co2 prices to curb coal demand the paper investigates how a carbon price could halt the comeback of coal which started in the early 2000s since the year 2000 coal has provided roughly 40 per cent of global primary energy growth the success of coal in the primary energy mix is due to the fact that it is abundant cheap and most often a domestic resource however global coal reserves if burnt would surpass the remaining carbon budget for a 2 c target by a factor of two the paper shows that a carbon price of 25 100 usd per tonne of co2 would be needed to phase out coal in the power sector depending on the technology and the world region even when assuming significant technological progress

do favorable land price policy affect renewable energy industry evidence from photovoltaics abstract renewable energy is necessary for sustainable social and economic development this is particularly so with global energy shortages the continuous deterioration of ecosystems and the environment as well as the world population explosion this article qualitatively and quantitatively analyzes the effects and problems of chinese favorable land price policy on photovoltaics in examining the favorable land price policy in china this study develops a multiple linear regression model to study the effects of favorable land price policy on photovoltaic power and photovoltaic industry data used in this research was mainly collected from 20 provinces in china it is found that the development of pv in china has been greatly affected by the favorable land price policy in the end it is highly recommended that favorable land price policy should be continued for renewable energy systemic deficiencies can be overcome through continual reform and innovation of mechanisms

location matters the impact of renewable power on transmission congestion and emissions abstract many governments offer subsidies for renewable power to reduce greenhouse gas emissions in the power sector however most support schemes for renewable power do not take into account that emissions depend on the location of renewable and conventional power plants within an electricity grid i simulate optimal power flow in a test grid when 4 renewable power plants connect to the grid across 24 potential sites amounting to over 10 000 configurations each configuration is associated with different levels of emissions and renewable power output i find that emission reductions vary by a factor of 7 and that curtailment due to transmission congestion is more likely when renewable power plants are concentrated in an area of the grid with low demand large cost savings could be obtained by allowing subsidies for renewable power to vary across locations according to abatement potential or by replacing subsidies with a price on emissions

fossil fuel producers under threat oil and gas producers face three threats prolonged low oil and gas prices tightening of climate policy and a tough budget on cumulative carbon emissions and technological innovation producing cheap substitutes for oil and gas these threats pose real risks of putting oil and gas producers out of business they lead to the problem of stranded assets and a significant downward valuation of oil and gas producers this calls for divesting from and shorting coal oil and gas the economies of oil and gas rich countries are typically in a deplorable state since they did not use their past windfalls to build up buffers and invest in a diversified economy more rapacious depletion of their oil and gas reserves will not help after the crash in oil and gas prices these countries are facing serious problems and it is difficult to see how they will cope with the outlined threats

regulation by prices quantities or both a review of instrument choice choosing appropriate policy instruments is an important part of successful regulation once objectives are agreed and suitable targets adopted policy makers can employ command and control regulation and or economic instruments and choose between fixing a price or a quantity this paper examines the relative advantages of price quantity and hybrid instruments according to their efficiency under uncertainty the trade off between credible commitment and flexibility implementation international considerations and political economy various illustrations of the theory are provided with two detailed applications to climate change and transport policy specifically congestion and safety pricing

the cumulative carbon budget and its implications the cumulative impact of carbon dioxide co2 emissions on climate has potentially profound economic and policy implications it implies that the long term climate change mitigation challenge should be reframed as a stock problem while the overwhelming majority of climate policies continue to focus on the flow of co2 into the atmosphere in 2030 or 2050 an obstacle however to the use of a cumulative carbon budget in policy is uncertainty in the size of this budget consistent with any specific temperature based goal such as limiting warming to 2 c this arises from uncertainty in the climate response to co2 emissions which is relatively tractable and uncertainty in future warming due to non co2 drivers which is less so we argue these uncertainties are best addressed through policies that recognize the need to reduce net global co2 emissions to zero to stabilize global temperatures but adapt automatically to evolving climate change adaptive policies would fit well within the paris agreement under the un framework convention on climate change

why should trade negotiators negotiate about in recent years there have been growing demands to make trade liberalization contingent on adoption of common labor and environmental standards the straightforward economic answer is that this makes little sense neither the gains from trade nor the gains from appropriate regulation are compromised if other countries impose standards that are weaker than your own it is possible to offer second bet economic rationales for harmonization but these are empirically unconvincing the only serious argument in favor or regulation is political that regulation which is in the national interest may not be politically feasible unless other countries do the same

limiting the costs of renewable portfolio standards a review and critique of current methods abstract over half of u s states have renewable portfolio standards rpss mandating that a minimum percentage of electricity sold derives from renewable sources state rpss vary widely in how they attempt to control or limit the costs of these rpss approaches utilized include alternative compliance payments direct rate caps and cost caps on resource acquisitions while some states employ no specific limitation at all this paper describes how states attempt to control rps costs and discusses the strengths and weaknesses of these various cost controls there is no one best method however the experience to date suggests that the most important factors in implementing an effective mechanism to curtail costs are clarity of the rule consistency in application and transparency for customers

why is it so difficult trade liberalization under the doha agenda many explanations have been offered for the current difficulties of the world trade organization wto in fact the system appears to have managed many of these challenges reasonably well including the increase in the number of members its mediaeval decision making procedures the changing geopolitical environment the rapid growth of preferential trade arrangements ptas the complexity of its agreements and concerns about erosion of unilateral preferences by contrast the near exhaustion of the traditional fuel of industrial country non agricultural tariffs the increasing importance of non trade concerns and incomplete adjustment to a new multi polar negotiating system appear to be important factors requiring further examination

a retrospective analysis of benefits and impacts of u s renewable portfolio standards abstract as states consider revising or developing renewable portfolio standards rps they are evaluating policy costs benefits and other impacts we present the first u s national level assessment of state rps program benefits and impacts focusing on new renewable electricity resources used to meet rps compliance obligations in 2013 in our central case scenario reductions in life cycle greenhouse gas emissions from displaced fossil fuel generated electricity resulted in 2 2 billion of global benefits health and environmental benefits from reductions in criteria air pollutants sulfur dioxide nitrogen oxides and particulate matter 2 5 were even greater estimated at 5 2 billion in the central case further benefits accrued in the form of reductions in water withdrawals and consumption for power generation finally although best considered resource transfers rather than net societal benefits new renewable electricity generation used for rps compliance in 2013 also supported nearly 200 000 u s based gross jobs and reduced wholesale electricity prices and natural gas prices saving consumers a combined 1 3 4 9 billion in total the estimated benefits and impacts well exceed previous estimates of rps compliance costs

can ccs and net enable the continued use of fossil carbon fuels after cop21 carbon capture and storage ccs does not generate energy ccs applied to fossil and modern bio carbon fuels and feedstocks removes environmentally damaging co2 emissions cop21 stipulated a maximum 2 c 1 5 c global warming from 2050 in perpetuity both ccs and negative emission technology net are now required to manage the carbon stock in earth s atmosphere and oceans all components of ccs are operationally proven secure at the industrial scale fifteen ccs projects operate globally seven are under construction ccs systems increase electricity prices to about 100 mwhr ccs on industry is cheaper and storage costs minimal 5 20 tonne ccs reduces whole economy costs of carbon transition by 2 5 times policies of capex subsidy oversupplied emissions certificates weak carbon pricing and weak emissions standards have all failed to develop large cost ccs mega projects new carbon certificates could link the extraction of carbon to an obligation to store a percentage of emissions certificates connect ccs and net pathways to secure carbon storage for the public good

the role of international and national agencies in trade related capacity building with increased recognition that trade can bring significant benefits to developing countries and the launch of a new trade round bilateral and multilateral agencies have begun to mobilise resources for trade related capacity building trcb the biggest challenge is to ensure that available resources are effectively utilised to deliver tangible benefits to developing countries this paper argues that the effective delivery of trcb relates specifically to two areas in country to help formulate appropriate trade positions as well as to place trade reform in the context of the country s overall development strategy that will promote a supply response and facilitate pro poor growth and secondly within the global rule making process to ensure that implementation of wto rules and efforts to negotiate and implement future disciplines makes sense from a development perspective and that trcb is considered in the context of other competing development needs the paper elaborates an issues based approach to bring the main providers to trcb and bilateral donors together to support recipient countries to include a trade agenda in their overall development strategy and to facilitate developing country participation and implementation of wto agreements that could be formulated within the global trade rules

energy the environment and innovation in this paper we review the theoretical and empirical literature on the role of policies in stimulating innovation that is designed to produce greener and more energy efficient technologies first we review the theoretical literature on the role of purely environmental policies in inducing firms to undertake environmental innovation the conclusion is that for a wide range of policies and in a wide range of circumstances one cannot prove that these policies necessarily induce greater innovation we then consider the empirical evidence which suggests that the effect of these policies is weak but that the largest effects come in the long run when through learning by doing firms better understand the scope and potential for new energy efficient technologies finally we consider the design of both environmental and technology policies and show that the interaction of these policies is complex and warrants considerable further research copyright 2002 oxford university press

policies and market factors driving wind power development in the united states abstract in the united states there has been substantial recent growth in wind energy generating capacity with growth averaging 24 percent annually during the past five years about 1700 mw of wind energy capacity was installed in 2001 while another 410 mw became operational in 2002 during 2003 development activity has remained strong with an estimated 1600 mw of capacity installed with this growth an increasing number of states are experiencing investment in wind energy projects currently about half of all states host at least one wind power project this paper explores the key factors at play in the 12 states in which a substantial amount of wind energy capacity has been developed or planned some of the factors that are examined include policy drivers such as renewable portfolio standards rps federal and state financial incentives as well as market drivers such as consumer demand for green power natural gas price volatility and wholesale market rules

electricity price increase in texas what is the role of rps over the last two decades more than half of the states in the united states have adopted a renewable portfolio standard rps while vital environmental goals underlie the rationale for rps there is a rising concern that the policy may lead to increased electricity prices using the synthetic control method we conduct a comparative case study of texas an early adopter of rps and arguably a success story our statistical tests find no evidence that rps was a contributing factor in texas s electricity price increase

the cost of solar centric renewable portfolio standards and reducing coal power generation using arizona as a case study abstract this paper develops an econometric forecasting system of energy demand coupled with engineering economic models of energy supply the framework is used to quantify the impact of a state level renewable portfolio standard rps achieved predominately with solar generation we perform the analysis using arizona s rps as a case study over the period 2012 2035 we find if arizona implements its rps when supplying future electricity demand there will be an increase in electricity rates relative to a business as usual scenario of reliance on gas fired generation extending the current regime of tax credits greatly reduces this increase at the taxpayers expense we find that by 2025 arizona s rps will implicitly abate carbon dioxide emissions at a cost between 58 and 82 per metric ton and by 2035 abatement costs are between 22 and 69 per metric ton depending on the future evolution of nature gas prices the rps always leads to a negative impact on social welfare under low gas prices but after 2029 the welfare impact is positive under high gas prices in contrast phasing out arizona s existing coal fired generation always has positive welfare impacts

aid and trade this paper surveys the recent theoretical and empirical literature that explores the relations between aid and trade and asks about the complementarity or substitution effects at work we distinguish between the effects of aid on trade flows and on trade policies of the donor as well as the recipient countries special focus is given on trade facilitation or aid for trade

multilateral trade cooperation what next this paper first briefly describes the role of the wto and its history it then lays out a simple bargaining model of international negotiations which can be used for understanding the doha round of talks this simple framework is used to distil and discuss a number of potential explanations for the difficulties that have arisen in concluding these talks as well as a number of systemic questions that confront wto members a key question is whether the wto should concentrate primarily on market access or on further expanding its coverage to deal with regulatory issues or with other domestic policies that may have an impact on trade given the difficulties that arise in agreeing on behind the border disciplines we argue that a continued focus on market access and enforcement of market access commitments is likely to prove most fruitful

liberalising temporary movement of natural persons an agenda for the development round we discuss liberalising the temporary mobility of workers under mode 4 of the gats particularly the movement of medium and low skilled service providers between developing and developed countries such mobility potentially offers huge returns a flow equivalent to three per cent of developed countries skilled and unskilled work forces would generate an estimated increase in world welfare of over us 150 billion shared fairly equally between developing and developed countries the larger part of this emanates from the less skilled essentially because losing higher skilled workers cuts output in developing countries severely the mass migration of less skilled workers raises fears in developed countries for cultural identity problems of assimilation and the drain on the public purse these fears are hardly relevant to temporary movement however the biggest economic concern from temporary mobility is its competitive challenge to local less skilled workers but as populations age and the average levels of training and education rise developed countries will face an increasing scarcity of less skilled labour temporary mobility thus actually offers a strong communality of interest between developing and developed countries the remainder of the paper looks at the gats provisions on mode 4 and the commitments that have been made under it the paper reviews several official proposals for the doha talks including the very detailed one from india and considers several countries existing schemes for the temporary movement of foreign workers many countries have long had bilateral foreign worker programmes and some regional agreements provide for liberal and flexible movement these show what is feasible and how concerns can be overcome we caution that to be useful any wto agreement must increase mobility not just bureaucratise it the paper concludes with some modest and practical proposals we suggest inter alia that licensing firms to arrange the movement of labour is the most promising short term approach to increasing temporary mobility

the future of fossil fuels is it the end contrary to the assumptions underlying many of current energy and climate policies the prices of fossil fuels have fallen and may remain at the new normal levels in the medium term iran and iraq have considerable potential to increase their outputs and the new shale technologies will gradually globalize longer term new technologies in electricity generation storage and smart demand side technologies together with electric cars and the shift towards digitalization and new electricity based technologies in manufacturing will increase demand for electricity but not fossil fuels these new and emerging technologies rather than international agreements and the promotion of current generation renewables will probably bring fossil fuel dominance to a gradual close to facilitate decarbonization energy policy should be directed at enhancing r d and next generation renewables instead of supporting existing ones

are we fracked the impact of falling gas prices and the implications for coal to gas switching and carbon emissions we discuss the environmental implications of the dramatic drop in the price of natural gas following the us shale gas boom due to the rise of modern hydraulic fracturing in the first part of the paper we argue that the ensuing drop in the price of natural gas has an ambiguous effect on global carbon emissions because of three countervailing effects coal to gas switching in the us electric power sector an increase in the relative cost of us renewable energy sources and an increase in us coal exports our position is that without a meaningful cap the shale gas boom is likely to increase global emissions and the period during which natural gas is used as a bridge fuel to clean energy should be limited in the second part of the paper we review recent environmental policies for the us electric power sector that have contributed to reducing carbon emissions and discuss the complex economics of the newly introduced clean power plan although the availability of cheap natural gas has been factored in us environmental policy and has helped electricity generators to achieve compliance with various rules and regulations it should not derail policy from its long run objective which is the transition to a less fossil fuel dependent economy

developing countries in the wto system applying robert hudec s analysis to the doha round in his 1987 developing countries in the gatt system robert hudec concluded that the identity of developing countries in the gatt system was primarily a matter of their demanding non reciprocal and preferential treatment developed countries responding grudgingly to those demands and that this situation had been unfruitful either to support developing country reforms or to discipline developed country restrictions aimed at developing countries hudec was pessimistic about the relationship becoming more productive but his expression of despair offered a glimmer of hope there are those who believe that the gatt has become so committed to the current policy that the only way to change it would be to start a new organization a new organisation was started the world trade organization but has the wto achieved what hudec hoped a new organisation might at the 1987 95 uruguay round developing country leaders acted as hudec had hoped they used international rules and bindings as leverage to support their own internally driven reforms to overcome generations of accumulated protection to lock in reforms against the backsliding that had undone previous reforms dealing with the uruguay round s unbalanced outcome and the overlapping implementation problem have shaped the doha round but the negotiations have misconceived and mismanaged both issues rather than seeking to identify their real economics the negotiations have gone back to the traditional idea of special and differential treatment perhaps the largest cost of this mismanagement is that in many developing countries the unilateral momentum for liberalisation has waned to the extent that the doha negotiations have drawn attention away from the domestic issues that were the basis of developing country liberalisation and enhanced the status of negotiators relative to the leaders who fought at home for reform they have contributed to that waning

the private and social economics of bulk electricity storage the ability to store excess intermittent renewable electricity is increasingly being seen as a key option for integrating large quantities of renewable capacity however intermittent energy sources currently account for very small amounts of total generation despite this fact policymakers have begun implementing requirements that will dramatically increase the amount of bulk storage capacity this paper examines the social benefits provided by bulk storage in the texas electricity market which has a large amount of renewable capacity relative to other states but still quite limited renewable penetration we focus on the impact of arbitraging electricity across time a major service of bulk storage using current storage technologies we demonstrate that electricity arbitrage will increase daily co2 emissions by an average of 0 19 tons for each mwh stored in addition daily so2 emissions will increase by an average of 1 89 pounds mwh while nox emissions will fall by an average of 0 15 pounds mwh

counterfactual comparisons of investment options for wind power and agricultural production in the united states lessons from northern ohio abstract we analyze potential efficiency gains in wind power projects by comparing counterfactual investment decisions in two different scenarios under a real options framework the first scenario is a standard wind power investment where the investor rents the land from local farms in the second scenario the wind power investor buys the land and commercializes both electricity and crop production thus reducing the revenue risk through the diversification both scenarios have a waiting option with the wholesale prices leading the installation decision we model the electricity price as a mean reverting process with jumps and with different jumping probabilities for the different seasons of the year corn prices follow a mean reverting process the waiting flexibility was modeled as a bundle of european options the results indicate that the waiting option is exercised in 100 of our simulations in both scenarios suggesting the still important role of government policies to stimulate wind power more importantly in more than 90 of the simulations the second scenario brought value to the investment furthermore net present values are more sensitive to reductions in capital costs than electricity prices these results can form the basis for more effective policies for the wind power sector

non discriminatory discrimination special and differential treatment under the gatt for developing countries developing countries have long been strong supporters of a non discriminatory rule based multilateral system on the grounds that as economically small units they would otherwise be subject to bilateral pressure from larger powers at the same time they have equally been committed to special and differential s d treatment for themselves under gatt rules their approach has been to argue that trade problems of developing countries are special from those of developed countries balance of payments problems viewed by them as endemic to low income countries make liberalisation difficult and import substitution strategies suggest that liberalisation is anyway undesirable poor export prospects export pessimism imply they need different treatment from developed countries in order to grow that is trade preferences in developed country markets special and differential also became a bloc wide strategy jointly pursued reflecting the premise that developing countries are jointly and simultaneously special and differential in their trade problems this is however changing in the uruguay round developing countries have shown themselves remarkably adept at moving away from the earlier somewhat passive bloc wide s d approach in a surprising range of negotiating groups countries have actively pursued country over bloc wide interests and in an active way involving a willingness to take on new gatt disciplines while s d is far from having been abandoned as a principle of the trading system the approach seems to be one of protecting and preserving what is there rather than pushing for further enhancement the reasons for these changes are as always multi faceted strong growth performance in the more outward oriented developing countries korea and other nics has weakened the intellectual commitment to import substitution what exactly s d has yielded developing countries in concrete trade policy terms has also been queried and over the years the differences between developing countries large small middle income least developed industrialised commodity exports agricultural importers exporters and others have grown to the point that in the uruguay round a grand coalition of all developing countries does not exist in any active sense

how effective are us renewable energy subsidies in cutting greenhouse gases the federal tax code provides preferential treatment for the production and use of renewable energy we report estimates of the subsidies effects on greenhouse gases ghg emissions developed in a recent national research council nrc report due to lack of estimates of the impact of tax provisions on ghg emissions new modeling studies were commissioned the studies found at best a small impact of subsidies in reducing ghg emissions in some cases emissions increased the nrc report also identified the need to capture the complex interactions among subsidies pre existing regulations and commodity markets

assessment of korean customers willingness to pay with rps abstract to increase the use of renewable energy the korean government will introduce the renewable portfolio standard rps in 2012 the rps places responsibility for extra renewable energy costs on the consumers and allows price competition among different renewable sources accordingly this study analyzes through the contingent valuation cv the willingness of korean households to pay more for electricity generated by wind photovoltaic pv and hydropower our empirical results show that although the willingness to pay or wtp was highest for wind power and lowest for hydropower the differences in wtp among the renewable sources were statistically insignificant this suggests that korean consumers prefer a renewable portfolio that minimizes power supply costs the average wtp for all three energy types was krw 1562 7 usd 1 350 per month per household which was approximately 3 7 of the average monthly electricity bill in 2010 this amount represents only 58 2 of what the korean government allocated in its budget to the new and renewable energy dissemination program in 2010 thus our results imply that the promotion of the new and renewable energy dissemination program may be difficult only with the wtp for electricity generated from renewable sources specifically the mean wtp will not support the set aside dissemination capacity for pv after 2014

the dynamics of the revenue maximization market share trade off saudi arabia s oil policy in the 2014 15 price fall given its highly undiversified economic base maximizing revenues will always rank highly in saudi arabia s output decision however this objective needs to be balanced against another maintaining its share in key markets and maximizing long term revenue given the massive size of saudi arabia s reserves the trade off between these two objectives tends to change over time depending on market conditions the nature of the shock and the behaviour of other producers saudi arabia s oil policy is hence not constant we argue that the advent of us shale has made the calculus of the trade off more uncertain complicating saudi arabia s output decision using a simple game we show that under uncertainty it is always safer for the kingdom to assume that the shale oil supply is highly elastic and thus decide not to cut output but as saudi arabia learns more about this new source of supply its policy could adapt accordingly the fact that saudi arabia s oil policy could change as the trade off between revenue maximization and market share evolves and as new information to the market arrives will keep the market second guessing and will continue to shape market expectations and to influence market outcomes jel q48 government policy d43 oligopoly and other forms of market imperfection q41 demand and supply prices d81 criteria for decision making under risk and uncertainty q02 commodity markets

demand pull instruments and the development of wind power in europe a counterfactual analysis renewable energy technologies are called to play a crucial role in the reduction of greenhouse gas emissions since most of these technologies did not yet reach grid parity public policies have been implemented in order to foster their deployment the approach that has been privileged in europe is the demand pull approach that aims at creating a demand for these new technologies and at stimulating their diffusion this paper examines the effect of demand pull policies on the diffusion of onshore wind power technology in six european countries denmark france germany italy portugal and spain in a first step a micro founded model of diffusion is calibrated in order to replicate the observed diffusion of wind power in these six countries in a second step a counterfactual analysis is conducted by investigating several scenarios by taking into account the complex self sustained dynamics of diffusion and the learning spillovers that operate in the wind power sector we can derive several insights about demand pull policies first the impact of a demand pull policy on the diffusion of wind power is determined by the stage at which it comes to support it the effect seems to be stronger at the beginning of the diffusion second international spillovers do operate in the wind power sector these international spillovers however are not strong enough to foster the diffusion of wind power in a country having no demand pull support we can derive from these two statements that a strategy consisting in not implementing any demand pull policy with the expectation that international spillovers will reduce the cost of wind power and foster the diffusion of the technology that then shall become competitive is not a good option for a country targeting a high share of wind power in its energy mix

the political economy of services trade liberalization a case for international regulatory cooperation little progress has been made since the creation of the wto on expanding and deepening the coverage of services liberalization commitments this paper identifies and discusses five hypotheses that may explain the absence of dynamism i technological changes allowing ever more services to be traded cross border unaffected by policy ii strong incentives to pursue liberalization on an autonomous basis unilaterally iii perceptions that bilateral or regional cooperation are a good substitute for the wto iv standard political economy factors such as adjustment costs and resistance by incumbents to erosion of rents and v concerns that the wto will affect the ability of regulators to enforce national norms we argue that all of these explanations play a role and that some of these factors significantly impede the scope for reciprocal exchanges of concessions the engine of wto negotiations copyright the author 2007 published by oxford university press

towards a new complexity economics for sustainability some of the most important and urgent topics requiring economic analysis and policy advice are the problems of climate change and environmental sustainability and what can be done to alter corporate and individual behaviour to deal with these issues neoclassical economists tend to focus on market solutions such as carbon trading drawing on ideas of perfect rationality of actors and the appropriateness of marginal analysis to link such policies to the whole range of potential actions from legislative and regulatory to changing individual behaviours requires the economy and society to be analysed in its full complexity recognising that marginal analysis can be not just irrelevant but positively harmful when the need is for systemic shifts in economic and social trajectories this article draws upon a seminar series on complexity economics to consider how heterodox economic analysis can be brought to bear on the issue of the environment to develop a realistic policy agenda for change copyright oxford university press

the effect of the production tax credit on wind energy production in deregulated electricity markets abstract this letter estimates the asymmetric influence of the production tax credit on wind energy production i find that states with deregulated electricity markets were more responsive to the tax incentive than their regulated counterparts excluding any external benefits from wind production this dissimilarity amounts to a monthly difference of up to 464 450 in federal benefits

renewable energy and politics a systematic review and new evidence abstract this paper reviews the literature in the intersection of renewable energies and politics adopting a multidisciplinary social sciences perspective we begin by analyzing the recent literature dealing with renewable energies and politics illustrating the analysis with bibliometric data the search protocol revealed 853 contributions dated from 1998 then we focus on the 186 contributions approached from a social sciences perspective establishing a taxonomy to classify the contributions into the main issues covered we identify contributions dealing with governance with public acceptance with markets and prices and with political or policy determinants of renewable energies in an empirical application we show that more democratic countries tend to invest more in renewable energies taking into account other determinants e g income energy dependence pollution emissions of this investment

wind power development in the united states abstract this paper analyzes the drivers of wind power development in the united states focusing on government renewable energy incentives and access to the electricity grid the effects of wind capacity electricity transmission line coverage and grid regulation as well as state and federal subsidies from 1998 to 2007 are estimated via random effects tobit probit and ordinary least squares instrumental variables regression the results indicate that the federal production tax credit state level sales tax credit and production incentives play an important role in promoting wind power in addition higher wind power penetration levels can be achieved by bringing more parts of the electricity transmission grid under independent system operator regulation this paper concludes that state and federal government policies play a significant role in wind power development both by providing financial support and by improving physical and procedural access to the electricity grid

balance of payments and related issues in the uruguay round of trade negotiations little attention has been paid to the balance of payments provisions of the general agreement on tariffs trade gatt despite the fact that they directly influence the trade policies of the developing countries this article suggests that there is a need to reconsider these provisions in the context of the ongoing uruguay round of multilateral trade negotiations the article traces the historical evolution of gatt practices on trade restrictions for balance of payments purposes with the general introduction of more flexible exchange rate arrangements the original rationale for temporary barriers to safeguard a country s external financial position appears to have lost its force recent theoretical and empirical work has demonstrated that neutral or export promoting trade strategies are more effective for development than the import substitution frequently advocated by economists in the 1950s and 1960s the current debt problems of developing countries strengthen the argument for a relatively open trade and payments regime to attain balance of payments viability the article suggests that stronger international discipline over trade restrictions for balance of payments purposes would contribute to and presuppose other necessary improvements in the multilateral trading system which are already on the agenda of the uruguay round

trade adjustment in the wto system are more safeguards the answer for countries to engage successfully in the international trading system their industries firms and workers must respond continually to new conditions of competition the continuing need to adjust arises both from policy changes approved in multilateral negotiations e g implementation of trade liberalization commitments preference erosion or adverse terms of trade consequences of export subsidy elimination and from ongoing changes in competitive pressures inherent in a liberal trading system e g effects on comparative advantage of changes in technology or factor supplies but the political response to a situation calling for adjustment is often a call for safeguards whether as an ex ante provision in negotiated agreements or as an ex post measure once the agreement has been signed and the reality of new conditions takes shape this paper examines the range of adjustment problems confronting the current and future international trading system the economic arguments for intervention to deal with these problems the adjustment environment as set out in the current world trade organization wto agreements and proposals for reform while the adjustment problems we discuss apply to both rich and poor wto member countries we highlight the issues of adjustment especially relevant for developing countries

endogenous spillovers and the performance of research joint ventures we present a model of r d with endogenous spillovers and demonstrate that noncooperation can produce maximal spillovers the only other noncooperative outcome is minimal spillovers when noncooperation achieves maximal spillovers so does an rjv whereas minimal noncooperative spillovers imply partial but not necessarily maximal spillovers by an rjv partial rjv spillovers are chosen for anti competitive reasons and an rjv may also close a lab for anti competitive reasons the possibility of anti competitive outcomes is precluded in the existing literature on rjvs which focuses on symmetric outcomes our model predicts when anti competitive behaviour by an rjv arises

regional free trade areas sorting out the tangled spaghetti as a result of the difficulties in negotiating the liberalization of trade globally countries seek liberalization among smaller groups we describe open regionalism as one such attempt to do this and show why after a decade of success it ran into the ground as a strategy the formation of discriminatory regional free trade areas ftas is sometimes seen as another response to this problem this paper point outs what is wrong with this response that it distorts trade patterns and thereby sets up an unpleasant prisoner s dilemma and suggests some ways forward we propose the formation of open trading arrangements otas and the establishment of a trade transparency commission in each country that is participating in an ota we also suggest global regulation of trade diversions caused by all ftas whether otas or not ultimately the return to health of the global trading system will require expanded understanding of the basic insight of economics that liberalization enhances the welfare of citizens of the liberalizing country

costs and benefits of renewables portfolio standards in the united states lbnl xxxx costs and benefits of renewables portfolio standards in the united states by galen barbose 1 jenny heeter 2 lori bird 2 samantha weaver 1 francisco flores espino 2 and ryan wiser 1 lawrence berkeley national laboratory national renewable energy laboratory corresponding author galen barbose research scientist electricity markets and policy group environmental energy technologies division lawrence berkeley national laboratory 1 cyclotron road ms 90r4000 berkeley ca 94720 phone 510 984 3453 email glbarbose lbl gov abstract as state level renewable portfolio standards rps have driven large increases in u s renewable generation capacity states have sought to quantify the costs and benefits of these policies this paper examines recent costs and benefits of rps implementation focusing on the net or incremental cost to utilities of renewables used for compliance with rps targets during the years 2010 2012 incremental rps cost estimates are developed using a wide variety of methods and assumptions which makes comparisons among states imperfect for states with restructured electricity markets we use a standardized method to calculate incremental costs based on renewable energy certificate prices alternative compliance payment levels and compliance obligations for states with traditionally regulated electricity markets we rely on estimates produced by utilities and regulators whose methods and underlying assumptions vary widely we find that recent estimated incremental rps costs were equivalent to less than 2 of retail rates in 17 states and about 2 4 in eight states or 4 mwh to 48 mwh of renewable energy required across all states for the most recent year available in each state estimated rps costs in most states were well below the respective cost caps although a few states are currently operating at or near their cap 1 introduction twenty nine states washington dc and puerto rico have adopted renewables portfolio standards rps helping drive a roughly eight fold increase in u s renewable generation capacity over the past decade concern over the impact of these policies on electricity prices and economic growth however has spurred recent legislation in at least a dozen states to repeal reduce or freeze existing rps requirements at the same time other recent legislative proposals have sought to expand state rps policies understanding the actual historical costs and benefits of rps policies is critical to informing these legislative debates but the subject is inadequately understood this paper examines historical costs of rps implementation drawing on a recent joint report by lawrence berkeley national laboratory and the national renewable energy laboratory estimating the costs and benefits of complying with renewable portfolio standards reviewing experience to date heeter et al 2014 1 we summarize the methods state agencies and utilities have used to assess rps costs compare incremental rps compliance costs to date and evaluate the potential for increases in rps compliance costs as legislative targets rise and cost caps in some states potentially become binding the aforementioned report also synthesizes recent estimates of broader societal benefits from formal state agency evaluations including estimates of health and emission reduction benefits economic development benefits and wholesale electricity market price reductions though those findings are not included in the present paper compared to the summary of estimated rps costs the summary of rps benefits is more limited as relatively few states have undertaken detailed benefits estimates and then only for a few types of potential policy impacts in some cases the same impacts may be captured in the assessment of costs for these reasons and because methodologies and level of rigor vary widely direct comparisons between the estimates of benefits and costs are challenging 2 methods and data sources for estimating incremental rps compliance costs rps compliance costs may be defined as either gross costs or incremental costs gross costs consist of the total cost of procuring renewables to meet the rps while incremental costs also referred to as net or above market costs represent this report is publically available at http emp lbl gov publications participation by lawrence berkeley national laboratory was supported by the office of energy efficiency and renewable energy solar technologies office of the u s department of energy under lawrence berkeley national laboratory contract no de ac02 05ch1131

state renewable energy electricity policies an empirical evaluation of effectiveness over the past decade state governments have emerged as us energy policy leaders across the country states are adopting policy instruments aimed at carbon mitigation and renewable energy deployment one of the most prevalent and innovative policy instruments is a renewable portfolio standard rps which seeks to increase the share of renewable energy electrification in the electricity market this analysis evaluates the effectiveness of state energy programs with an empirical investigation of the linkage between state rps policy implementation and the percentage of renewable energy electricity generation across states we use a variant of a standard fixed effects model referred to as a fixed effects vector decomposition with state level data from 1998 to 2006 results indicate that rps implementation is not a significant predictor of the percentage of renewable energy generation out of the total generation mix yet for each additional year that a state has an rps policy they are found to increase the total amount of renewable energy generation these findings reveal a potentially significant shortcoming of rps policies political institutions natural resource endowments deregulation gross state product per capita electricity use per person electricity price and the presence of regional rps policies are also found to be significantly related to renewable energy deployment

the disparate influence of state renewable portfolio standards on renewable electricity generation capacity several papers have used panel data analyses to examine the effectiveness of u s state level renewable portfolio standards rps in promoting renewable capacity development but the findings are inconclusive estimation of average treatment effects however can mask the fact that rps policies across states are disparate and the treatment states are heterogeneous we use the synthetic control method to conduct individual case studies of the early adopter states our findings indicate that the impact of rps policies varied across states we find texas to be unique among these early adopters in that the rps policy in texas has led to increased renewable capacity jel q42 q48

what s powering wind the effect of the u s state renewable energy policies on wind capacity 1994 2012 abstractas of 2012 29 states had enacted a renewable portfolio standard rps while 37 states had at least one utility offering green power purchasing gpp to their customers the goal of both policies is to promote the adoption of clean renewable energy this article examines the influence of these polices on wind capacity across the united states from 1994 2012 a period of significant expansion of the wind generation market the analysis focuses on wind because as compared with other modern renewable energy sources wind is the only renewable energy source to make significant inroads into the u s electricity generation market my findings indicate that while there have been significant increases in commercial scale wind generation capacity neither rps nor gpp programmes had a significant influence on within state wind capacity additions