Saturday, April 21, 2012

Why RPSs?

Renewable energy promotion is a fascinating topic. It raises myriad questions--from whether government should get involved in technology choice to what instruments are likely to work best, if that choice is made.

These efforts also bring a remarkable number of issues into play, not just from the environmental, energy, and climate side but from perspectives of innovation policy, investment, public goods, and energy security as well, to name only a few. Some of the questions I have found most intriguing are in instrument choice: Which laws will work best at promoting greater use of renewables (and, in turn, to help sustainable technologies reach greater economies of scale)?

In the U.S., of course, the primary mechanism has been the renewable portfolio standard, or RPS. Recently, I have spent a large amount of time parsing through the details of nearly 40 of these statutes in the U.S. It is an exercise that, I’m sure, my (excellent) research assistants find either close to torture or, if we are being more honest, one step short of Hades.

Actually, I find it to be enormously interesting, even if the work of coding statutes on a day-to-day basis is undeniably tedious. The sheer diversity in these laws becomes ever more remarkable--and blatant--with a reading of each statute. To give just two examples, North Carolina’s numerous revisions to its scheme to deal with poultry waste and Vermont’s we-don’t-need-an-RPS-oh-wait-yes-we-do seesaw between its so-called SPEED program and what looks like is going to become an RPS in the state make clear just how complex, and fraught with room for manipulation, these laws can be.

A nagging question, though, is why states adopt these laws at all. Clearly there are political considerations motivated by climate change. Increasingly, however, it seems state governments also are pointing to RPSs as a way to promote jobs, as I recently explored in an article applying regulatory race theory to RPSs.

I noticed this yesterday as my research assistant and I were going through Vermont’s statute. Several years after the state passed its first law, it added language to say that a purpose of the renewables promotion scheme was to bring industry and jobs to Vermont. If this kind of after-the-fact revision of what the law’s core aim is not expose how broadly state legislatures see the objectives of these laws, I am not sure what does.

Thus, going forward, a critical question for RPSs is not only whether they work, but also what they are trying to work toward. Notably, Joshua Fershee and Thomas Lyon and Haitao Yin have already begun to provide much more thought-through, nuanced, and insightful answers than my mere summary here can.

Certainly, it will be an area for more fruitful, and useful, scholarship in the future.

-Lincoln Davies

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