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. 36, issue 2, 97-116

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.

Keywords: Renewable energy; Environmental quality; Environmental Kuznets curve; Electricity mix; Transition; Unemployment (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:sae:enejou:v:36:y:2015:i:2:p:97-116

DOI: 10.5547/01956574.36.2.5

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