Interaction Effects of Market-Based and Command-and-Control Policies

Tuladhar, Sugandha D.; Mankowski, Sebastian; Bernstein, Paul

doi:10.5547/01956574.35.si1.4

Cited by 23 publications

(10 citation statements)

References 7 publications

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“…Rather, as widely recognized in economics literature, "internalizing externalities" is most efficiently achieved by directly pricing those externalities rather than through technology-or sector-specific policies. This is in part due to possible economy-wide rebound, spillover, or leakage effects and also because such policies more directly target the achievement of public benefits (Borenstein 2012;IPCC 2011;IPCC 2014a;Kalkuhl et al 2013;McKibbin et al 2014;Tuladhar et al 2014).…”

Section: • Considering Costs In the Equationmentioning

confidence: 99%

A Retrospective Analysis of the Benefits and Impacts of U.S. Renewable Portfolio Standards

Wiser

Barbose

Heeter

et al. 2016

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PREFACE This is one report in a series that explores the costs, benefits, and other impacts of state renewable portfolio standards (RPS), both retrospectively and prospectively. The terminology applied in this series does not align precisely with the traditional concepts of costs and benefits, but rather is a function of how RPS programs have often been evaluated in practice. In particular, this analysis series evaluates RPS programs in terms of the following:• RPS compliance costs represent the incremental cost of meeting RPS compliance obligations, from the perspective of the utility or other load-serving entity, compared to the costs that would have been borne in the absence of the RPS. RPS compliance costs may be negative, if the renewable electricity used for RPS compliance is less expensive to the utility than the alternatives. • Benefits, as analyzed in this report series, consist specifically of environmental benefits that accrue to society at large, rather than to individual utilities. In theory, such benefits may be negative, representing net environmental costs, if the renewable electricity used for RPS compliance leads to more harmful environmental impacts than it avoids. • Other impacts, in the form of resource transfers from one market participant or segment to another, are also evaluated. These other impacts may also entail net costs or benefits to society at large, but our analyses focus only on the gross impacts, not the net cost or benefit.The first report, A Survey of State-Level Cost and Benefit Estimates of Renewable Portfolio Standards, published in 2014, comprehensively summarized historical RPS compliance costs, drawing in part on estimates developed by utilities and state regulatory agencies. The study also reviewed analyses of the broader societal benefits and impacts of several states' RPS policies, typically conducted for or by the regulatory agencies or RPS administrators in those states. However, the small number of such studies, and their widely varying methods and scopes, ultimately limited the ability to compare benefits across states or to generalize beyond the specific studies performed. That limitation set the stage for the present study.This report, the second in the series, analyzes historical benefits and impacts of all state RPS policies, in aggregate, employing a consistent and well-vetted set of methods and data sets. The analysis focuses on three specific benefits: greenhouse gas emissions, air pollution, and water use. It also analyzes three other impacts: gross job additions, wholesale electricity market price suppression, and natural gas price suppression. These are an important subset, but by no means a comprehensive set, of all possible effects associated with RPS policies. These benefits and impacts are also subject to many uncertainties, which are described and, to the extent possible, quantified within the report.The present report is intended to help policymakers, RPS administrators, and other decision-makers gauge the potential significance of a number of key b...

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Section: • Considering Costs In the Equationmentioning

confidence: 99%

A Retrospective Analysis of the Benefits and Impacts of U.S. Renewable Portfolio Standards

Wiser

Barbose

Heeter

et al. 2016

View full text Add to dashboard Cite

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“…The specific costs and benefits of increased wind development will be impacted by the nature of the policy and market levers used to encourage that development; as such, the present work suggests the general magnitude of these impacts only. Related research has found that policies specifically designed to internalize external costs and correct for market failures are likely to be more cost effective than technology-or sector-specific policy incentives, in part due to possible economy-wide rebound and spillover effects and also because such policies more-directly target the achievement of public benefits (Borenstein 2012;Edenhofer et al 2013;Fischer and Newell 2008;Fell and Linn 2013;IPCC 2011;IPCC 2014b;Kalkuhl et al2013;McKibbin et al 2014;Novan 2014;Rausch and Karplus 2014;Tuladhar et al 2014). Therefore, while the present analysis may suggest a significantly positive role for wind energy, achieving those benefits to the maximum and most cost-effective degree is likely to require a policy framework that moves away from direct support of wind to one that more effectively and more broadly addresses key market failures and unpriced externalities.…”

Section: Discussionmentioning

confidence: 99%

Long-term implications of sustained wind power growth in the United States: Potential benefits and secondary impacts

et al. 2016

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We model scenarios of the U.S. electric sector in which wind generation reaches 10% of end-use electricity demand in 2020, 20% in 2030, and 35% in 2050. As shown in a companion paper, achieving these penetration levels would have significant implications for the wind industry and the broader electric sector. Compared to a baseline that assumes no new wind deployment, under the primary scenario modeled, achieving these penetrations imposes an incremental cost to electricity consumers of less than 1% through 2030. These cost implications, however, should be balanced against the variety of environmental and social implications of such a scenario. Relative to a baseline that assumes no new wind deployment, our analysis shows that the high-penetration wind scenario yields potential greenhouse-gas benefits of $85-$1,230 billion in present-value terms, with a central estimate of $400 billion. Air-pollution-related health benefits are estimated at $52-$272 billion, while annual electricsector water withdrawals and consumption are lower by 15% and 23% in 2050, respectively. We also find that a high-wind-energy future would have implications for the diversity and risk of energy supply, local economic development, and land use and related local impacts on communities and ecosystems; however, these additional impacts may not greatly affect aggregate social welfare owing to their nature, in part, as resource transfers.

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“…Rather, as widely recognized in the economics literature, "internalizing externalities" is generally most cost-effectively achieved by directly pricing those externalities rather than through technology-or sector-specific policies. This is partly due to possible economy-wide rebound, spillover, or leakage effects, and also because such policies more directly target the achievement of public benefits (Borenstein 2012;Edenhofer et al 2013;IPCC 2011;IPCC 2014;Kalkuhl et al 2013;McKibbin et al 2014;Tuladhar et al 2014). Research focused on RPS policies has highlighted these possible effects, finding that the desired benefits of RPS programs may not be fully achieved or achieved as cost effectively as might be desired (Bushnell et al 2007;Carley 2011;Fischer and Newell 2008;Fell and Linn 2013;Rausch and Karplus 2014), though other research suggests that the pitfalls of such "second-best" policies may be modest (Kalkuhl et al 2012).…”

Section: General Limitationsmentioning

confidence: 99%

A Prospective Analysis of the Costs, Benefits, and Impacts of U.S. Renewable Portfolio Standards

Mai

Wiser

Barbose

et al. 2016

View full text Add to dashboard Cite

PREFACE This is one report in a series that explores the costs, benefits, and other impacts of state renewable portfolio standards (RPS), both retrospectively and prospectively. The first report, A Survey of State-Level Cost and Benefit Estimates of Renewable Portfolio Standards, published in 2014, comprehensively summarized historical RPS compliance costs, drawing in part on estimates developed by utilities and state regulatory agencies. The study also reviewed analyses of the broader societal benefits and impacts of several states' RPS policies, typically conducted for or by the regulatory agencies or RPS administrators in those states. However, the small number of such studies, and their widely varying methods and scopes, ultimately limited the ability to compare benefits across states or to generalize beyond the specific studies performed. That limitation set the stage for future reports.The second report in the series, A Retrospective Analysis of the Benefits and Impacts of U.S. Renewable Portfolio Standards, published in January 2016, analyzed historical benefits and impacts of renewable energy (RE) used to meet all state RPS policies, in aggregate, employing a consistent and well-vetted set of methods and data sets. The analysis focuses on three specific benefits: air pollution, greenhouse gas emissions, and water use. It also analyzes three other impacts: gross job additions, wholesale electricity market price suppression, and natural gas price suppression. These are an important subset, but by no means a comprehensive set, of all possible effects associated with RPS policies. That report did not include a comparison of costs and benefits of renewables used to meet RPS policies, and nor did it assess the potential costs, benefits, and impacts prospectively based on future increases in RPS targets.The present report fills that gap by evaluating the future costs, benefits, and other impacts of renewable energy used to meet current state RPS polices. It also examines a future scenario where RPSs are expanded. The analysis examines changes in electric system costs and retail electricity prices, which include all fixed and operating costs, including capital costs for all renewable, non-renewable, and supporting (e.g., transmission and storage) electric sector infrastructure; fossil fuel, uranium, and biomass fuel costs; and plant operations and maintenance expenditures. The analysis uses the same framework as the second report to analyze three specific benefits: air pollution, greenhouse gas emissions, and water use. It also analyzes two other impacts, RE workforce and economic development, and natural gas price suppression.The terminology applied in this series does not align precisely with the traditional concepts of costs and benefits, but rather is a function of how RPS programs have often been evaluated in practice. This analysis series, particularly the present report, evaluates renewable energy used to meet RPS policies in terms of costs, benefits, and other impacts:

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Interaction Effects of Market-Based and Command-and-Control Policies

Cited by 23 publications

References 7 publications

A Retrospective Analysis of the Benefits and Impacts of U.S. Renewable Portfolio Standards

A Retrospective Analysis of the Benefits and Impacts of U.S. Renewable Portfolio Standards

Long-term implications of sustained wind power growth in the United States: Potential benefits and secondary impacts

A Prospective Analysis of the Costs, Benefits, and Impacts of U.S. Renewable Portfolio Standards

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