The cost of carbon dioxide abatement from state renewable portfolio standards

Erik Paul Johnson

Resource and Energy Economics, 2014, vol. 36, issue 2, 332-350

Abstract: Renewable portfolio standards (RPSs) have become a popular tool for state governments to promote renewable electricity generation and to decrease carbon dioxide emissions within a state or region. Renewable portfolio standards are a policy tool likely to persist for many decades due to the long term goals of many state RPSs and the likely creation of a federal RPS alongside any comprehensive climate change bill. Even though RPSs have become a popular policy tool, there is little empirical evidence about their costs. Using the temporal and regional variation in RPS requirements, I estimate the long-run price elasticity of supply of renewable electricity generation to be 2.67 (95% CI of 1.74, 3.60). Using my preferred elasticity estimate, I calculate the marginal cost of abatement from RPSs is at least $11 per ton of CO2 compared to a marginal cost of abatement of $3 per ton in the Regional Greenhouse Gas Initiative.

Keywords: Energy; Electricity; Cost of carbon abatement; Renewable portfolio standards (search for similar items in EconPapers)
JEL-codes: Q28 Q42 Q52 Q58 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (33)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:resene:v:36:y:2014:i:2:p:332-350

DOI: 10.1016/j.reseneeco.2014.01.001

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