By Antonio M. Bento, Teevrat Garg, Daniel Kaffine
Journal of Environmental Economics and Management
Renewable portfolio standards (RPS) are commonly promoted as a policy tool to reduce emissions associated with fossil generation, while also stimulating development of local renewable resource endowments. We develop a general equilibrium model of an RPS policy that captures key features such as a fixed factor renewable endowment, substitution across sectors of the economy, and endogenous price responses. We analytically decompose the effects of an RPS into a) a substitution effect, b) an output-tax effect, and c) an output effect. We show that an increase in the RPS can either deliver large resource booms or large emissions savings but not both. Our framework can translate different renewable resource endowments and pre-existing standards across states into economic and environmental impacts to inform current renewable energy and climate policies.
By Antonio M. Bento, Richard Klotz
Environmental Science & Technology
Lifecycle analysis (LCA) metrics of greenhouse gas emissions are increasingly being used to select technologies supported by climate policy. However, LCAs typically evaluate the emissions associated with a technology or product, not the impacts of policies. Here, we show that policies supporting the same technology can lead to dramatically different emissions impacts per unit of technology added, due to multimarket responses to the policy. Using a policy-based consequential LCA, we find that the lifecycle emissions impacts of four US biofuel policies range from a reduction of 16.1 gCO2e to an increase of 24.0 gCO2e per MJ corn ethanol added by the policy. The differences between these results and representative technology-based LCA measures, which do not account for the policy instrument driving the expansion in the technology, illustrate the need for policy-based LCA measures when informing policy decision making.