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American Economic Review Vol. 104 No. 5 2014

How Effective are US Renewable Energy Subsidies in Cutting Greenhouse Gases?

Brian C. Murray1; Maureen Cropper2; Francisco C. de la Chesnaye3; John M. Reilly4

1 Duke University, 2117 Campus Dr. Box 90335, Durham, NC 27708 (e-mail: ) · 2 University of Maryland and Resources for the Future, 3114 Tydings Hall, College Park, MD 20742 (e-mail: ) · 3 Electric Power Research Institute, 3420 Hillview Avenue, Palo Alto, CA 94304 (e-mail: ) · 4 Massachusetts Institute of Technology, 50 Memorial Drive, Cambridge, MA 02142 (e-mail: )

Abstract

The federal tax code provides preferential treatment for the production and use of renewable energy. We report estimates of the subsidies' effects on greenhouse gases (GHG) emissions developed in a recent National Research Council (NRC) Report. Due to lack of estimates of the impact of tax provisions on GHG emissions, new modeling studies were commissioned. The studies found, at best, a small impact of subsidies in reducing GHG emissions; in some cases, emissions increased. The NRC report also identified the need to capture the complex interactions among subsidies, pre-existing regulations, and commodity markets.

DOI
10.1257/aer.104.5.569
Volume
104
Issue
5
Pages
569-574
Language
en
Sources
bibtex:phds-export.bib openalex crossref

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