February 13, 2011

Federal Policies for Renewable Electricity

by Karen L. Palmer, Anthony Paula and Matthew Woerman

- Three types of policies that are prominent in the federal debate over addressing greenhouse gas emissions in the United States are a cap-and-trade program (CTP) on emissions, a renewable portfolio standard (RPS) for electricity production, and tax credits for renewable electricity producers. Each of these policies would have different consequences, and combinations of these policies could induce interactions yielding a whole that is not the sum of its parts. This paper utilizes the Haiku electricity market model to evaluate the economic and technology outcomes, climate benefits, and cost-effectiveness of three such policies and all possible combinations of the policies.

Palmer, K.L., A. Paula and M. Woerman (2010). "Federal Policies for Renewable Electricity." RFF Discussion Paper 10-53, Jan 2011.