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U.S. federal government subsidies for clean energy: Design choices and implications

Publication ,  Journal Article
Newell, RG; Pizer, WA; Raimi, D
Published in: Energy Economics
May 1, 2019

Subsidies for clean energy deployment have become a major component of U.S. federal energy and climate policy. After a surge in spending under the American Recovery and Reinvestment Act of 2009, they are an even larger component but now face increased scrutiny. Given their lasting presence, how does one design these subsidies to be as cost-effective as possible? Surprisingly, the conceptual framework and empirical evidence available to help policymakers identify which subsidies generate the most “bang for the buck” are limited. To help answer this question, we begin with an overview of the justifications for, and the arguments against, subsidizing clean energy technologies. Next, we briefly describe major subsidies. Finally, we summarize key design choices, suggesting an increased focus on upfront cash payments for physical outcomes such as capacity. This contrasts with the considerable focus on tax credits, loan guarantees, production, and cost-based subsidies which have been more prominent to date.

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Published In

Energy Economics

DOI

ISSN

0140-9883

Publication Date

May 1, 2019

Volume

80

Start / End Page

831 / 841

Related Subject Headings

  • Energy
  • 3802 Econometrics
  • 3801 Applied economics
  • 3502 Banking, finance and investment
  • 1402 Applied Economics
  • 0913 Mechanical Engineering
  • 0906 Electrical and Electronic Engineering
 

Citation

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Newell, R. G., Pizer, W. A., & Raimi, D. (2019). U.S. federal government subsidies for clean energy: Design choices and implications. Energy Economics, 80, 831–841. https://doi.org/10.1016/j.eneco.2019.02.018
Newell, R. G., W. A. Pizer, and D. Raimi. “U.S. federal government subsidies for clean energy: Design choices and implications.” Energy Economics 80 (May 1, 2019): 831–41. https://doi.org/10.1016/j.eneco.2019.02.018.
Newell RG, Pizer WA, Raimi D. U.S. federal government subsidies for clean energy: Design choices and implications. Energy Economics. 2019 May 1;80:831–41.
Newell, R. G., et al. “U.S. federal government subsidies for clean energy: Design choices and implications.” Energy Economics, vol. 80, May 2019, pp. 831–41. Scopus, doi:10.1016/j.eneco.2019.02.018.
Newell RG, Pizer WA, Raimi D. U.S. federal government subsidies for clean energy: Design choices and implications. Energy Economics. 2019 May 1;80:831–841.
Journal cover image

Published In

Energy Economics

DOI

ISSN

0140-9883

Publication Date

May 1, 2019

Volume

80

Start / End Page

831 / 841

Related Subject Headings

  • Energy
  • 3802 Econometrics
  • 3801 Applied economics
  • 3502 Banking, finance and investment
  • 1402 Applied Economics
  • 0913 Mechanical Engineering
  • 0906 Electrical and Electronic Engineering