Do Renewable Portfolio Standards Result in Lower Carbon Emissions? An Econometric Assessment of State-Level Climate Policy

Abstract

Renewable portfolio standards are among the most popular state-level policies designed to decrease reliance on fossil fuels and increase renewable energy use. These standards require that a certain share of a state’s electricity come from renewable sources by a given date. Several existing studies show that state adoption of renewable portfolio standards is positively correlated with state renewable energy capacity. However, few studies have examined the relationship between renewable portfolio standard adoption and carbon emissions from the electricity sector. This paper seeks to fill that gap in the literature. Using panel data for the period 1992 to 2016, I estimate the relationship between adoption of a renewable portfolio standard and carbon emissions from the electricity sector at the state level. I find limited evidence to support the idea that state renewable portfolio standards are related to carbon emissions from the state’s electricity sector. As states and other political units seek to decarbonize their electricity sectors, my findings suggest that additional research is needed to better understand the outcomes associated with policies such as renewable portfolio standards.