EconPapers    
Economics at your fingertips  
 

Renewable energy economics

David Timmons

Chapter 12 in Building a Climate Resilient Economy and Society, 2017, pp 196-210 from Edward Elgar Publishing

Abstract: Fossil-fuel-led growth has been a major contributory factor to rapid rise in carbon emissions. Emissions of CO2 from fossil-fuel combustion and industrial processes contributed about 78% of the total GHG emissions increase from 1970 to 2010. Cutting down on use of fossil fuels and shifting to clean energy sources is therefore a major strategy for combating global warming. This chapter discusses the economic principles that should govern renewable energy choices. Renewable energy sources including biomass energy, water power, wind, solar, and geothermal energy have somewhat different characteristics than fossil fuels: they are capital-intensive with their costs dependent on interest rates, their costs are highly dependent on their scales and production sites, and many renewable energy sources are available only intermittently. Minimizing the total cost of providing renewable energy suggests that marginal costs of individual renewable energy sources be equal. In many areas, use of more expensive sources such as solar photovoltaic energy will thus make it economical to develop hydropower and wind power on sites that might not appear feasible currently. Similarly, the marginal cost of renewable energy suggests that additional energy conservation will be economical, and a large portion of the transition to renewable energy will likely be accomplished through energy conservation rather than energy production. To minimize total costs, equality of marginal costs must also hold at all points of time and from all points in space, suggesting possibilities for energy storage and long-distance energy transmission facilities. While the market would eventually accomplish a renewable energy transition as a result of rising fossil-fuel prices, public policy will likely be needed to make the renewable energy transition soon enough to avoid the worst effects of climate change.

Keywords: Economics and Finance; Environment; Geography; Politics and Public Policy Social Policy and Sociology (search for similar items in EconPapers)
Date: 2017
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.elgaronline.com/view/9781785368448.00024.xml (application/pdf)
Our link check indicates that this URL is bad, the error code is: 503 Service Temporarily Unavailable

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:elg:eechap:17181_12

Ordering information: This item can be ordered from
http://www.e-elgar.com

Access Statistics for this chapter

More chapters in Chapters from Edward Elgar Publishing
Bibliographic data for series maintained by Darrel McCalla ().

 
Page updated 2025-03-31
Handle: RePEc:elg:eechap:17181_12