RT Journal Article
SR Electronic
T1 What Is the Cost of a Renewable Energy–Based Approach to Greenhouse Gas Mitigation?
JF Land Economics
JO Land Econ
FD University of Wisconsin Press
SP 437
OP 458
DO 10.3368/le.93.3.437
VO 93
IS 3
A1 Oliver, Anthony
A1 Khanna, Madhu
YR 2017
UL http://le.uwpress.org/content/93/3/437.abstract
AB Energy policies for greenhouse gas (GHG) mitigation in the United States have set sector-specific standards, such as the Renewable Fuel Standard (RFS) and the Renewable Portfolio Standard (RPS) for the transportation and the electricity sectors, respectively. This paper examines the welfare costs and effectiveness of GHG abatement with these policies and compares them with those under a carbon tax normalized to achieve the same level of abatement over the 2007–2030 period. We show that the global welfare cost per ton of GHG abatement with the RFS and RPS is $171, while with the carbon tax it is $7. (JEL Q42, Q58)