Do Renewable Portfolio Standards Deliver Cost-Effective Carbon Abatement?

The most prevalent and perhaps most popular climate policies in the U.S. are Renewable Portfolio Standards (RPS) that mandate that renewables (e.g., wind and solar) produce a specified share of electricity, yet little is known about their efficiency. Using the most comprehensive data set ever compiled and a difference-in-differences style research design, we find that electricity prices are 11% higher seven years after RPS passage, largely due to indirect grid integration costs (e.g., transmission and intermittency). On the benefit side, carbon emissions are 10-25% lower. The cost per ton of CO2 abatement ranges from $58-$298 and is generally above $100.