Date of Completion

2017

Document Type

Honors College Thesis

Department

Economics

Thesis Type

Honors College

First Advisor

Donna Ramirez-Harrington

Second Advisor

Abigail Crocker

Third Advisor

Richard Sicotte

Keywords

renewable energy policy, energy, policy, policy effectiveness, energy tax, renewable portfolio standard, RPS, command and control, market based policy

Abstract

This study is an empirical assessment of the effectiveness of state renewable energy policies at increasing renewable energy generation. The theory of externalities explains that renewable energy will be under-produced by the market without government intervention, justifying the importance of increased understanding of the effectiveness of various policy instruments. Economic theory suggests that both command and control (CAC) and market-based incentive (MBI) policies can be used to address this market failure and can be equally effective under perfect information and perfect enforcement. In practice, standard setting and enforcement differ, and empirical evidence has shown that the effectiveness of the two types of policies differ. Additionally, it is possible that increased renewable energy generation is not only driven by energy policies, but also by certain economic, demographic, and political factors.

In this study two research questions are investigated: Which policy is more effective in promoting increased renewable energy generation: market-based or command and control policies? And, what other factors affect renewable energy generation in a state? Any and all insights gained through the investigation of these two questions will contribute to answering the overarching question asked by economists, environmentalists, political scientists, and ultimately policymakers of which types of policies can most effectively be used to promote renewable energy generation?

Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

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