ATI Study: National Renewable Electricity Standard Would Devastate Economy

Source:  http://www.atinstitute.org/blog_post/show/69

Proposals to implement a national Renewable Portfolio Standard (RPS) ? such as the 80 percent ?clean energy standard? by 2035 suggested by President Obama in his State of the Union speech this week ? would impose severe economic costs, including job losses and cuts in family income, according to a study published today by the American Tradition Institute.

The report explored the potential costs under national RPSs of 15 percent, 20 percent and 30 percent by the year 2021. A bill imposing a 15 percent mandate was introduced at the end of last year?s Congressional session and had bipartisan sponsorship, and a 30 percent mandate by 2021 would be possible ? probably even necessary ? under the president?s proposal. ATI?s study determined that a devastating blow to an already struggling economy would occur under any of the RPS scenarios under consideration.

The analysis, performed by economists at the Beacon Hill Institute at Suffolk University in Boston, found that costs of as much as $42.5 billion would hit the U.S. economy in 2021 under a 15 percent national RPS, with costs as high as $528 billion over a 20-year period through the year 2039. Under a more ambitious 30 percent RPS by 2021 ? closer to the scenario desired by President Obama ? the costs could be as high as $190 billion in 2021 and over $4 trillion over the 20-year period through 2039.

?We?ve already seen the folly and failures of the Obama administration?s pursuit of a ?clean? energy economy and ?Green? jobs, which has extended our economic malaise and unemployment problems,? said Paul Chesser, executive director of the American Tradition Institute. ?Now the president doesn?t just want to double-down, but triple- or quadruple-down on this fiasco of an energy policy.?

The report also explores other economic, environmental and health effects from a possible national RPS. ATI and BHI address the impacts upon electricity prices, employment, gross wages, investment, and disposable income, while also highlighting the inconsistency, unreliability, and increased pollution that results from the use of alternative energy sources such as wind. Finally the study also considers negative impacts on health ? even increased numbers of deaths ? that would result from a national RPS policy, based upon data from the EPA and Centers for Disease Control.

?Contrary to what environmentalists would have you believe, these dramatic increases in energy costs would actually destroy lives rather than save them,? Chesser said. ?You need only to look at the Third World to understand that an affordable, reasonably clean energy system like we have in the U.S. increases quality and length of life. It is to be imitated, not demolished.?

President Obama?s recommendation in his State of the Union speech was not unexpected by ATI, as the administration?s failure to pass a cap-and-trade law last year signaled a pivot to push for renewables mandates ? hence, ATI commissioned BHI to conduct this research.

?The President could not even bring himself to mention ?global warming? or ?climate change? in his speech,? Chesser said. ?And now we have a policy without a purpose. Are we going to pursue these destructive mandates simply for a political victory? In light of the findings of our report, the president?s proposal ? and all RPS?s ? should be immediately rejected.?

See ATI’s Study of the Effects of Federal Renewable Portfolio Standard Legislation on the U.S. Economy. ( http://www.atinstitute.org/uploads/File/ATINationalRPSReport.pdf )

For an interview with Paul Chesser, executive director for the American Tradition Institute, call (202)670-2680 or contact him at paul.chesser@atinstitute.org.
For an interview with an economist at the Beacon Hill Institute, call Frank Conte at (617)573-8750 or contact him at fconte@beaconhill.org.