Valuing the Wind: Renewable Energy Policies and Air Pollution Avoided

Kevin Novan

American Economic Journal: Economic Policy, 2015, vol. 7, issue 3, 291-326

Abstract: Exploiting variation in the hourly production from wind turbines, this paper quantifies the heterogeneity in the marginal impact of renewable electricity on pollution. The results reveal that output from competing renewable capacity additions—e.g., wind turbines versus solar panels—provide different marginal external benefits. This finding suggests that, if governments continue to subsidize renewables, an emphasis should be placed on designing policies that internalize the heterogeneous benefits. More generally, my results highlight that, by incorrectly assuming renewable electricity is a homogenous good, we will understate the relative efficiency of the first-best pollution prices. (JEL L94, L98, Q42, Q48, Q51, Q53, Q58)

JEL-codes: L94 L98 Q42 Q48 Q51 Q53 Q58 (search for similar items in EconPapers)
Date: 2015
Note: DOI: 10.1257/pol.20130268
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Citations: View citations in EconPapers (127)

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