Evaluating Policies to Increase Electricity Generation from Renewable Energy

By R. Schmalensee. Review of Environmental Economics and Policy, 2012

205 citations recorded by the source corpus.

Building on a review of experience in the United States and the European Union, this article advances four main propositions concerning policies aimed at increasing electricity generation from renewable energy. First, who bears the short-run costs of programs to subsidize the generation of electricity from renewable sources varies with the organization of the electric power industry, and this variation may be a significant contributor to such programs’ political attractiveness in U.S. states. Second, despite the greater popularity of feed-in tariff schemes worldwide, renewable portfolio standard (RPS) programs may involve less long-run social risk. Third, in contrast to the European Union’s approach to reducing carbon dioxide emissions, its renewables program is almost certain not to minimize the cost of achieving its goals. Fourth, state RPS programs in the United States are also almost certain to cost more than necessary, even though most use market mechanisms. To support this last proposition I provide a fairly detailed description of actual markets for renewable energy credits and their shortcomings.

Subfields: Economics and Econometrics, Electrical and Electronic Engineering, Renewable Energy, Sustainability and the Environment

View Paper: https://www.semanticscholar.org/paper/cc510852e174e7392054dd9165b39c0d22d9b95a

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Citations in the corpus

Renewable Generation and Electricity Prices: Taking Stock and New Evidence for Germany and Austria (2013, background): “See Schmalensee (2012) for a critical assessment of renewable support schemes in the EU and the US.”
Funding Renewable Energy: An Analysis of Renewable Portfolio Standards (2017, background): “While it is generally known that RPSs can lead to increases in electricity prices (Schmalensee, 2012; Kydes, 2006; Palmer and Burtraw, 2005), this is the first paper to econometrically find evidence of this increase from an ex-post difference-indifferences style approach.”
The evaluation of renewable energy policies across EU countries and US states: An econometric approach (2016, background): “FIT policies offer guaranteed prices for fixed periods of time for electricity produced from RE sources (Couture and Gagnon, 2010; Schmalensee, 2012).”
Competitive advantage in the renewable energy industry: Evidence from a gravity model (2019, background): “…however, about the efficiency of renewable energy support schemes , and about the additional benefits that were promised by green growth advocates, particularly the opportunities in terms of jobs, technologies and competitiveness of domestic industry (e.g. Schmalensee 2012; Helm 2014; Cullen 2016).”
National and Sub-national Policies and Institutions (2014, background): “(Schmalensee, 2012) shows in a simple theoretical model 15 that the long-run societal risk may in fact generally be lower under the RPS approach than under a 16 FIT regime.”
Consumers' willingness to pay for renewable and nuclear energy: A comparative analysis between the US and Japan (2015, background): “15 Schmalensee (2012) is critical ofmany independent state-level RPS policies because a program that allows trading across the states could achieve the same amount of renewables at a lower total cost.”
A comparative study of feed-in tariff and renewable portfolio standard policy in renewable energy industry (2015, background): “Schmalensee [28] argues that it cannot prove that FIT is better than RPS only through the comparison of renewable energy industry in Germany and the UK.”
The U.S. Electricity Industry After 20 Years of Restructuring (2015, unknown): “36See Joskow (2011) and Schmalensee (2012).”