Publication

How Effective are U.S. Renewable Energy Subsidies in Cutting Greenhouse Gases?

Maureen Cropper, Brian C. Murray, Francisco de la Chesnaye and John M. Reilly , American Economic Review Papers and Proceedings 104(5) , 569-574 , May 2014.
Abstract:

The federal tax code provides preferential treatment for the production and use of renewable energy. We report estimates of the subsidies' effects on greenhouse gases (GHG) emissions developed in a recent National Research Council (NRC) Report. Due to lack of estimates of the impact of tax provisions on GHG emissions, new modeling studies were commissioned. The studies found, at best, a small impact of subsidies in reducing GHG emissions; in some cases, emissions increased. The NRC report also identified the need to capture the complex interactions among subsidies, pre-existing regulations, and commodity markets.

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