wind energy policy: a view from political sciencehome.eng.iastate.edu/~jdm/wind/policy.pdf · wind...
TRANSCRIPT
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Wind Energy Policy: A View From PoliticalScience
David A. M. Peterson
June 14, 2012
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Preview
• Policy history
• National policy
• State/regional policy
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Why Support Wind?
Meets several political goals:
1 Domestic energy production
2 Environmental concerns
3 Economic development
But it involves government intervention into the market.
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Why Support Wind?
Meets several political goals:
1 Domestic energy production
2 Environmental concerns
3 Economic development
But it involves government intervention into the market.
![Page 5: Wind Energy Policy: A View From Political Sciencehome.eng.iastate.edu/~jdm/wind/Policy.pdf · Wind energy has doubled during this time. Result of uncertainty! PTC will expire Set](https://reader034.vdocuments.net/reader034/viewer/2022042409/5f25463242bb4b06ab2c8d1a/html5/thumbnails/5.jpg)
Policy History
Motivated by energy prices, but not cost competitive.Focuses on 4 keys areas:
1 Tax Policy
2 Renewable Energy Standards (RES)
3 Transmission
4 Siting
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Policy History
• Energy Policy and Conservation Act of 1975
• Public Utility Regulatory Policies Act of 1978
• Renewable Energy and Energy Efficiency TechnologyCompetitiveness Act of 1989
• Energy Policy Act (EPACT) of 1992• Renewable Electricity Production Tax Credit• Renewable Energy Production Incentive
• Energy Policy Act of 2005
• American Reinvestment and Recovery Act of 2009
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Mechanisms
The problem is that wind energy is too expensive
Two solutions: mandates or lower costs
• Tax incentives for development
• Tax credits for production
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Mechanisms
The problem is that wind energy is too expensiveTwo solutions: mandates or lower costs
• Tax incentives for development
• Tax credits for production
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Mechanisms
The problem is that wind energy is too expensiveTwo solutions: mandates or lower costs
• Tax incentives for development
• Tax credits for production
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Success of PTC
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Success of PTC
Creates strong incentives for development of wind power
• Makes wind cost competitive
• Lead to massive increases
• Capacity increased 45 percent in 2007
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Problems
Predictability of PTC:
• Created in 1992
• Lapsed from June to December 1999
• Lapsed from December 2001 to March 2002
• Lapsed from December 2003 to October 2004
• Expires December 2012
Wind energy has doubled during this time
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Result of uncertainty
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PTC will expire
• Set to expire at end of year
• Will make wind competitive only in the best locations
• Already developed
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Why is it unpredictable?
Public opinion matters
• Members of Congress fear for reelection
• Public opinion matters for voting (sometimes)
• MC’s pay attention to opinion when it matters for elections
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Why is it unpredictable?
Opinion about wind energy:
• Popular: 87 percent support
• Shallow support
• 18 percent know that it costs more
• Information matters for opinion
MC’s aren’t afraid of opposing wind energy
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Why is it unpredictable?
Opinion about wind energy:
• Popular: 87 percent support
• Shallow support
• 18 percent know that it costs more
• Information matters for opinion
MC’s aren’t afraid of opposing wind energy
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Why is it unpredictable?
The nature of our political institutions.
• Unitary president
• Majoritarian House
• Supermajoritarian Senate
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Why is it unpredictable?
The nature of our political institutions.
• Unitary president
• Majoritarian House
• Supermajoritarian Senate
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Why is it unpredictable?
• Each player get a veto
• Policy is gridlocked if any prefers the status quo
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Spatial model of Congress
Think of policy along a single left right dimension. Everyone has apreferred location on this dimension.
Actor votes for a policy if it is closer to his or her ideal point thanthe status quo.Institution passes if veto player approves.
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Spatial model of Congress
Think of policy along a single left right dimension. Everyone has apreferred location on this dimension.Actor votes for a policy if it is closer to his or her ideal point thanthe status quo.
Institution passes if veto player approves.
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Spatial model of Congress
Think of policy along a single left right dimension. Everyone has apreferred location on this dimension.Actor votes for a policy if it is closer to his or her ideal point thanthe status quo.Institution passes if veto player approves.
![Page 24: Wind Energy Policy: A View From Political Sciencehome.eng.iastate.edu/~jdm/wind/Policy.pdf · Wind energy has doubled during this time. Result of uncertainty! PTC will expire Set](https://reader034.vdocuments.net/reader034/viewer/2022042409/5f25463242bb4b06ab2c8d1a/html5/thumbnails/24.jpg)
Spatial model of Congress
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Spatial model of Congress
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When have we seen policy activity?
• 1975: Ford and post Watergate
• 1978: Carter and Democratic Congress
• 1989: Bush I and Democratic Congress
• 1992: Bush I and Democratic Congress
• 2005: Bush II and Republican Congress
• 2009: Obama and Democratic supermajority.
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Why not now?
Congress is more polarized than ever:
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Why not now?
Congress is more polarized than ever:
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Why not now?
Opposition:
• Heritage Foundation action
• Wind is now competing
• Gas and coal
• Less support for all “subsidies”
Action often linked to external events (oil embargo, Exxon Valdez)
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Not just national policy
Energy policy is federal–state, local, and regional matter too
1 Tax Policy
2 Renewable Energy Standards (RES)
3 Transmission
4 Siting
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Key State Policies
• Greenhouse gas emission targets (22 states)
• Tax policy
• Regional initiatives
• Renewable Portfolio Standards
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Tax Credits
Tax Credits for Renewables www.dsireusa.org / March 2012
Corporate tax credit(s) only
Personal + corporate tax credit(s)
Notes: This map does not include corporate or personal tax deductions or exemptions; or tax incentives for geothermal heat pumps.
Personal tax credit(s) only Puerto Rico
DC
24 states offer tax
credits for renewables
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Regional initiatives
• Cap and trade based• Politically unstable
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Renewable Portfolio Standards
Mandate a minimum of renewable energy from utilities
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Renewable Portfolio Standards
• Rapidly expanding (Iowa first)
• Vary on what “counts”
• Encouraging federal action
• Several need to be updated
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What explains state policy?
• Problem severity
• Capacity
• Politics
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Capacity
• Fiscal status
• Institutional
1 Legislative2 Gubernatorial3 Bureaucratic
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Politics
• Citizenry
• Interest groups (on both sides)
• Political control over institutions
• Diffusion
1 Learning2 Competition3 Internal pressures4 Federal involvement