Yet RPS policies have flourished without much sense of their cost. That’s the question that the new study seeks to answer.
The study, still in draft form and not yet peer-reviewed, finds that renewable standards tend to make electricity more expensive. Seven years after a state passes an RPS, the price of electricity rises by about 11 percent, and a standard unit of power—a kilowatt-hour—becomes about one cent more costly.
“There is a clear upward turn in prices once a state adopts an RPS, and it just kind of marches upwards as the standards get more stringent,” said Greenstone, who co-wrote the paper with Ishan Nath, another economics researcher at the university.
An RPS does lead to a moderate decline in carbon pollution, the study finds. But Greenstone and Nath argue that this reduction comes at a steep price. They say that, under an RPS, it costs at least $130 to prevent a ton of carbon pollution from entering the atmosphere. That’s far more expensive than the $50-per-ton carbon tax that Barack Obama’s administration once calculated.
The paper’s title is, “Do Renewable Portfolio Standards Deliver?” Its answer seems to be no—or at least, no, when compared with a carbon tax.
The study was first covered by Axios last month, and lawmakers have already cited it in debates about a state RPS. But the paper has become a flash point. In the days after its release, several experts have raised questions about the scope of its argument.
I spoke with five outside researchers for this story, including two economists. All of them took some issue with the paper’s purported scope: While the research was impressive, they said, it should not be taken as the last word about RPSes. Several of them also argued that the study confused too many different state laws, that it left out important benefits of an RPS, and that—above all—it couldn’t actually answer the most relevant question about RPS policies.
The authors freely admit to some of these difficulties in the paper. But some of the experts held that, even with those admissions, the paper could still be misused by enemies of all climate policy.
The controversy points to some of the larger questions haunting the academic study of global warming: What do we really have to know to fight climate change? What can economics tell us about some of the toughest questions raised by the climate crisis? When the fate of the planet is at stake, should we care about saving every marginal dollar?
The big critiques of the new Chicago paper fall along three lines. First, some experts took issue with the aspects of RPS policies that the authors tried to measure. Second, some experts take issue with what the paper didn’t measure. Finally, most of the experts worried about what the paper can’t measure.
Leah Stokes, a political-science professor at UC Santa Barbara, is very much in the first camp. She is writing a book about state standards, and the most important thing to know about them, she told me, is that it’s very rare that state lawmakers actually passed an RPS by itself.