June 15, 2009

The Economics of Renewable Energy

by Geoffrey Heal

- Greater use of renewable energy is seen as a key component of any move to combat climate change, and is being aggressively promoted as such by the new U.S. administration and by other governments. Yet there is little economic analysis of renewable energy. This paper surveys what is written and adds to it. The conclusion is that the main renewables face a major problem because of their intermittency (the wind doesn’t always blow nor the sun always shine) and that this has not been adequately factored into discussions of their potential.

Heal, G. (2009). "The Economics of Renewable Energy." NBER Working Paper No. 15081, June 2009.