Affiliation:
1. Assistant Professor of Economics, Washington University, Olin Business School, Campus Box 1133, One Brookings Drive, St. Louis, MO 63130.
Abstract
Production subsidies for renewable energy, such as solar or wind power, are rationalized by their environmental benefits. Subsidizing these projects allows clean, renewable technologies to produce electricity that otherwise would have been produced by dirtier, fossil-fuel power plants. In this paper, I quantify the emissions offset by wind power for a large electricity grid in Texas using the randomness inherent in wind power availability. When accounting for dynamics in the production process, the results indicate that only for high estimates of the social costs of pollution does the value of emissions offset by wind power exceed cost of renewable energy subsidies. (JEL L94, L98, Q42, Q48, Q51, Q53, Q54)
Publisher
American Economic Association
Subject
General Economics, Econometrics and Finance
Cited by
190 articles.
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