Finding the Right Place for RPS

While cap-and-trade systems (and to a lesser extent carbon taxes) are being widely proposed and implemented to reduce greenhouse gas emissions, these policies are often supplemented with other policies such as renewable portfolio standards (RPS) that regulate the share of renewables in power generation.

This Weekly Policy Commentary by Christoph Böhringer and Knut Einar Rosendahl discusses how RPS affect the costs of emissions control programs, whether or not there is an economic justification for these policies, and, if implemented, how these policies should be designed.