2. U.S. Energy Policies John Stevenson Econ 539 Winter 2008

3. U.S. Energy Priorities: Reduced Carbon Emissions: Reduced Carbon Emissions: Energy Independence Energy Independence Economic Growth Economic Growth

4. Future Outlooks from 2001: Brown et al “Scenarios for a clean energy future” 2001 Brown et al “Scenarios for a clean energy future” 2001 – – Adoption of certain policies could reduce projected carbon emissions upwards of 30% by 2020 without economic costs exceeding gains (Brown et all 2001)

5. Implications for Clean Electricity Carbon Cap and Trade Carbon Cap and Trade –Increase demand for wind energy by 50% –Decrease carbon emission by ~30%

6. What the federal gov’t has done: Nearly 8 years later we have rumors of carbon cap-and-trade system being proposed. Nearly 8 years later we have rumors of carbon cap-and-trade system being proposed.

7. Role of the States: Renewable Portfolio Standards (RPS) Renewable Portfolio Standards (RPS) –Reduce carbon emissions –Reduce dependence on foreign oil –Increase economic development

8. Renewable Portfolio Standards –Call for % of state energy consumption be renewably generated by specific date: –E.G. Oregon requires 25% by 2025. –29 states have RPS with ranges between 2% (IA) and 33% (CA)

9. Performance 20 state study concluded: 20 state study concluded: –Carbon dioxide decreased 16% by 2020 –Electricity bill increase of 1-3%

10. Is the choice of renewable portfolio standards random?

11. Predictors of RPS: Dominancy of Democratic party Dominancy of Democratic party High levels of education High levels of education

12. Analysis: Role of crude oil $ increases Role of crude oil $ increases –~$24.00 (2000); ~$105.00 (2008) –Increase demand for coal? –Federal carbon cap may be more effective under these conditions –RPS at state level is an improvement, but a federal carbon cap would be more effective in meeting national energy goals.

13. Analysis Federal Gov’t Missed the Boat Federal Gov’t Missed the Boat –Lack of federal policy leads to state initiative –Not all states will adopt RPS, - not a reliable way to meet national priorities. –RPS and economic growth?

14. References: Brown, M. A, Levine, M. D., Short, Walter, Koomey, J. G., 2001. “Scenarios for a clean energy future” Energy Policy 29, 1179-1196. Huang, M-Y, Janaki, A. R.R, Carter, D. R., Langholtz, M.H. 2007. “Is the choice of renewable portfolio standards random?” Energy Policy 35, 5571-5575 Palmer. K., Burtraw, D., 2005 “ Cost-effectiveness of renewable electricity policies”, Energy Economics 27 873-894. www.pewclimate.org/docUploads/ RPSReportFinal.pdf Rabe, B.G., 2006. “The Expanding Role of U.S. State Renewable Portfolio Standards” Pew Center on Global Climate Change, Arlington, VA. www.pewclimate.org/docUploads/ RPSReportFinal.pdf (Accessed March 8, 2008) www.pewclimate.org/docUploads/ RPSReportFinal.pdfwww.pewclimate.org/docUploads/ RPSReportFinal.pdf