THE BENEFITS AND ISSUES OF A NATIONAL CLEAN ENERGY STANDARD

The Effects of Renewable or Clean Electricity Standards
July 2011 (Congressional Budget Office)

"Many policymakers have expressed interest in mandating that a minimum percentage of the electricity consumed in the United States be generated from renewable or “clean” sources of energy. A majority of states have implemented similar requirement…known as renewable or clean electricity standards…[that] would reduce emissions of carbon dioxide (CO2), the most prevalent greenhouse gas, by decreasing the percentage of electricity generated from fossil fuels. That change would not significantly reduce energy imports, however, because most of the energy used for electricity generation in the United States already comes from domestic sources…

"A national RES or CES would alter the mix of energy sources used to produce electricity, the amount of CO2 emitted, and the price of electricity, with those effects varying by region. To illustrate the effects, the Congressional Budget Office compared the results of seven analyses…with a variety of design features and relied on…different assumptions about the costs of relevant technologies…"

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"Most analyses concluded that the bulk of the increase in renewable generation resulting from an RES or CES would come from additional wind generation (mainly in the High Plains region of the western and central United States) and from biomass generation (mainly in the Southeast). The relative importance of those sources depends heavily on assumptions about the availability of resources in different regions and about the relative costs of various technologies…

"… Although the costs of meeting a particular RES or CES cannot be predicted with certainty, they could be reduced by incorporating certain design features. For example, allowing unrestricted trading of credits, expanding the range of energy sources that could be used to comply with the policy, phasing in the standard gradually, and giving companies the flexibility to shift credits between years would all make an RES or CES policy more cost-effective…"