Renewable Portfolio Standards: A Double-Edged Sword? Impact on State-Level GDP in the United States

Sammanfattning

Renewable Portfolio Standards (RPSs) are major state-level policies present in the US. We examine the impact of RPSs on state-level Gross Domestic Product (GDP) per capita, focusing on the complexities introduced by their staggered and heterogeneous implementation. Due to the endogenous nature of RPS adoption influenced by unique state characteristics, there are significant challenges in using traditional econometric methods. We, thus, employ the novel Synthetic Difference-in-Differences (SDID) approach,to address the non-random adoption of these policies. Overall, our results signify no loss of economic value by adopting RPSs. But we do find weak evidence confirming that, on average, these policies increase GDP per capita by USD 3092 over the period of our analysis, 1990-2022. This research contributes to the understanding of the efficacy of RPS programs and informs policy-making in the realm of state-level renewable energy initiatives.