chapter  6
16 Pages

Economically Efficient Policies toward Renewable Energy

ByChristopher J. Pleatsikas, Edward A. Hudson, Richard Goettle

This chapter investigates the policy conclusions relating to renewable energy resources. In all circumstances, economic performance is adversely affected by greater use of renewables. Increased penetration does least economic harm when renewable costs are low and nonrenewable costs are high, while more harm occurs when renewable costs are relatively high and nonrenewable costs are relatively low. The restructuring of the energy system toward increased supplies from renewable sources, therefore, results in lower overall economic productivity and reduced production and real income potential. The penetration effect column gives the cumulative change in total real Gross National Product over the 1980 to 2000 period due to the increase in renewables penetration, other conditions remaining unchanged. The benefits from renewables in terms of reducing the economic damage from higher prices for conventional fuels. The investigations into economically efficient public policy toward renewable energy must be considered in determining the appropriate role and direction for government policy toward renewable energy.