The Economics & Policy division covers topics including climate change, environmental justice, environmental racism, gender & equity, cap & trade, carbon taxes, energy resource economics.
While innovative, renewable technologies are being developed, economic policy is central to deploying said technologies on a massive scale. In order to reduce perceived risks from the private sector for financing large renewable projects, incentives driven from economic policy are key to achieving economies of scale. Cost is the principal barrier to widespread adoption of renewable energy, and policies such as state renewable portfolio standards and the federal renewable energy production tax credit aim to close that cost gap through subsidies while also increasing the market penetration of these technologies. Policies like these greatly drive renewable energy market penetration, however are not quite enough to achieve net-zero emissions by 2050.
Under a carbon tax, for example, the government sets a price that emitters must pay for every ton of greenhouse gas emissions they emit. Here, the tax reflects the true cost of using fossil fuels. Namely, the external societal costs that affect homeowners, farmers, and even the government. This economic-based approach incentivizes GHG-emitting enterprises to lower their emissions and to eventually shift to renewable technologies as the price of carbon is assumed to increase.
Relating to electronic vehicles (EV’s), these economic incentives range from purchase rebates and tax credits. Currently, the U.S. government encourages EV adoption by enabling everyone who buys one with a federal tax credit up to $7,500. In California, the Zero-Emission Vehicle Program requires vehicle manufacturers to sell specific numbers of EV’s to meet a quota based on percentage of total sales in the state. This program forces them to produce EV’s irrespective of market demand. 11 other states have joined the Zero-Emission Vehicle Program.
Policy is absolutely central to deploying renewable technologies on a massive scale.. If the Economics and Policy division is interesting to you, consider joining!
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