At least, installing the current generation of renewables isn’t the way to try to tackle climate change. It just makes both us and those in the future poorer than necessary. Any method of trying to reduce emissions which is more costly than the social cost of those emissions does this. Thus we shouldn’t be doing it as our aim is to make all humans across time as well off as possible.
Renewables so far don’t do this:
I’ve written often about the economic nightmare that are renewables, specifically wind and solar power. They are terribly inefficient because they are intermittent, and they are diffuse. The intermittency requires maintaining substantial backup capacity. Their diffuse nature means that they are incredibly land intensive. I should also add that renewable energy sources are not miraculously located where loads are. Indeed, they are often located far, far away from load, and therefore necessitate substantial investment in transmission.
It’s certainly technically possible to install more renewables. So is everyone eating nothing but tofu as a protein source. But that’s not the issue at hand. It’s whether we should:
Renewable Portfolio Standards (RPS) are the largest and perhaps most popular climate policy in
the US, having been enacted by 29 states and the District of Columbia. Using the most comprehensive panel data set ever compiled on program characteristics and key outcomes, we compare
states that did and did not adopt RPS policies, exploiting the substantial di↵erences in timing
of adoption. The estimates indicate that 7 years after passage of an RPS program, the required
renewable share of generation is 1.8 percentage points higher and average retail electricity prices
are 1.3 cents per kWh, or 11% higher; the comparable figures for 12 years after adoption are a 4.2
percentage point increase in renewables’ share and a price increase of 2.0 cents per kWh or 17%.
These cost estimates significantly exceed the marginal operational costs of renewables and likely
reflect costs that renewables impose on the generation system, including those associated with their
intermittency, higher transmission costs, and any stranded asset costs assigned to ratepayers. The
estimated reduction in carbon emissions is imprecise, but, together with the price results, indicates
that the cost per metric ton of CO2 abated exceeds $130 in all specifications and ranges up to
$460, making it least several times larger than conventional estimates of the social cost of carbon.
These results do not rule out the possibility that RPS policies could dynamically reduce the cost
of abatement in the future by causing improvements in renewable technology.
No, we shouldn’t.
Amazing what science can tell us, isn’t it?