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Department of Agricultural, Environmental, and Development Economics


Ohio State Research Shows Substantial Link Between State-level Renewable Energy Portfolio Standards and Reduced Carbon Emissions

May. 2, 2014

This article was originally published on the website of Ohio State's College of Food, Agricultural, and Environmental Sciences. 

May 1, 2014

COLUMBUS, Ohio -- New research by a former Ohio State University graduate student and a professor in the university’s College of Food, Agricultural, and Environmental Sciences finds that state-level implementation of renewable portfolio standards (RPS) in the U.S. reduced national carbon emissions by 4 percent in 2010, with more substantial reductions expected in the future.
The standards are directives from state legislatures that require the increased production of energy in a state from renewable energy sources, such as wind or solar energy.
The study, released in April as a discussion paper by Washington, D.C.-based Resources for the Future, is the first to look at the link between RPS and carbon intensity -- measured in carbon emissions per dollar of gross state product -- and energy prices. Carbon intensity reflects an economy’s reliance on carbon-based energy, taking into consideration the types of energy used, overall efficiency and economic output.
The authors of the study were Samantha Sekar, who holds master’s degrees from Ohio State in both agricultural economics and environmental science and is now a research assistant with Resources for the Future, and Brent Sohngen, professor of environmental and resource economics in the college’s Department of Agricultural, Environmental and Development Economics and director of Ohio State’s Environmental Policy Initiative.
The 4 percent nationwide emissions reduction figure is significant, the authors said, especially considering that not all U.S. states have adopted these standards and those that have are in their initial years of implementation.
To conduct their research, Sekar and Sohngen estimated a model of carbon intensity from 1997 to 2010, a period over which a large number of state-level RPS mandates were passed and implemented.
Previous studies have examined the influence of state-level RPS implementation on various attributes, including renewable energy adoption and carbon emissions, but no studies to date have looked at the implications for carbon intensity, which Sekar and Sohngen’s research aimed to do.
One reason earlier studies found no link between RPS and overall carbon emissions is that the studies ignored the role of energy prices. But in their own study, Sekar and Sohngen theorized and found that the most important impact of RPS is an increase in energy prices. 
In their research, the authors found consistently lower carbon intensity among states that have adopted RPS, as these states were 30 percent less carbon intensive than states that have never adopted a standard.
“Our approach accounts for whether states have adopted an RPS at all and then the timing and stringency of their regulations. We find that adoption of RPS appears to have been done mainly by states that already were at the lower end of the carbon intensity spectrum within the U.S.,” Sekar said.

Through their economic modeling, the researchers found that population density, industrial composition, region, temperature and time all affect carbon intensity. They found that states with higher population densities had lower carbon intensities, with a 1-percent increase in population density linked to a 6- to 7-percent reduction in carbon intensity.
The researchers also found that states with greater proportions of the economy dependent on mining and healthcare were more carbon intensive than states with large information or finance industries. State environmental attributes, such as high summer temperatures and low winter temperatures, also appeared to inherently raise carbon intensities.
“These results are really important for states like Ohio, which recently has discussed rolling back its landmark renewable energy legislation,” Sohngen said. “The law has helped reduce our state level carbon emissions, although residential energy prices are about 0.8 percent higher than they otherwise would be.”
Based on their analysis, Sekar and Sohngen found that state-level RPS implementation should reduce carbon intensity nationwide. Of importance, they found in their model that each $0.01 kilowatt hour increase in electricity prices reduced carbon intensity by about 1 percent, with a slightly smaller overall effect in states with RPS.
“Based on the literature, higher electricity prices are an expected result of RPS, but our findings suggest that electricity prices are actually the main mechanism by which RPS has an impact on carbon intensity,” Sekar said.
The researchers concluded that over the long run, for continued economic growth, the only way to reduce overall carbon emissions at both the state and national levels is to also reduce carbon intensity. Thus, they said, it is critical to examine the relationship between state-level RPS implementation and carbon intensity.
“The impact of RPS on U.S. carbon emissions has been increasing annually,” Sekar said. “The largest reduction measured in our study was about 4 percent in 2010, meaning that if no RPS had been passed, total U.S. emissions would have been 4 percent higher, and that level of mitigation is expected to increase, because the average percent of renewables mandated in 2010 was 8.6 percent, and in 2020 the average mandate in states that have passed RPS will be 22.7 percent.”
The study, “The Effects of Renewable Portfolio Standards on Carbon Intensity in the U.S.”, can be read at
Nicole Pierron Rasul
Samantha Sekar
Brent Sohngen