Factors affecting the rise of renewable energy in the U.S.: Concern over environmental quality or rising unemployment?

Adrienne M. Ohler

The Energy Journal, 2015, vol. Volume 36, issue Number 2

Abstract: This paper studies the development of renewable energy (RE) in the U.S. by examining the capacity to generate electricity from renewable sources. RE capacity exhibits a U-shaped relationship with per capita income, similar to other metrics for environmental quality (EQ). To explain this phenomenon, I consider several of the environmental Kuznets curve theories that describe the relationship between income and environmental quality (Y-EQ), including evolving property rights, increased demand for improved EQ, and changing economic composition. The results fail to provide support for the Y-EQ theories. I further consider the alternative hypothesis that increases in unemployment lead to increases in relative RE capacity, suggesting that promoting RE projects as a potential job creator is one of the main drivers of RE projects. The results imply that lagged unemployment is a significant predictor of relative RE capacity, particularly for states with a large manufacturing share of GDP.

JEL-codes: F0 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (13)

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