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Do Renewable Portfolio Standards Deliver?

February 26, 2021
By Michael Greenstone, Ishan Nath

Renewable Portfolio Standards are a popular but expensive and inefficient way to reduce carbon dioxide emissions.

Renewable Portfolio Standards (RPS), mandate that renewables (e.g., wind and solar) produce a specified share of electricity, are a prevalent method many legislatures have imposed in an effort to reduce carbon dioxide emissions .

After seven years these renewable requirements raise retail electricity prices by 11%, or about $30 billion higher prices for consumers. After 12 years the costs are 17% higher.

Although RPS's do reduce carbon emissions from electric power generation by between 10 and 25 percent. The cost per ton of CO2 abatement ranges from $58-$298 and is generally above $100, and the cost to consumers is “above conventional estimates of the social cost of carbon.”