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Energies 2013, 6(3), 1266-1297; doi:10.3390/en6031266

Balancing Fiscal, Energy, and Environmental Concerns: Analyzing the Policy Options for California’s Energy and Economic Future

Department of Economics and Finance, University of Wyoming, 1000 University Ave, Laramie, WY 82072, USA
School of Social Sciences, University of Manchester, Oxford Road, Manchester, M13 9PL, UK
Author to whom correspondence should be addressed.
Received: 6 December 2012 / Revised: 24 January 2013 / Accepted: 16 February 2013 / Published: 4 March 2013
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This study estimates the fiscal, energy, and environmental tradeoffs involved in supplying California’s future energy needs. An integrated framework is developed whereby an econometric forecasting system of California energy demand is coupled with engineering-economic models of energy supply, and economic impacts are estimated using input-output models of the California economy. A baseline scenario in which California relies on imported electricity to meet future demand is then compared against various energy supply development scenarios over the forecast horizon (2012–2035). The results indicate that if California implements its renewable portfolio standard (RPS), there will be a substantial net cost in terms of value added, employment, and state tax revenues because the economic benefits of building capacity are outweighed by higher energy prices. Although carbon emissions fall, the cost per ton of avoided emissions is well above market prices. Building out natural gas fired generation capacity also leads to losses compared to the baseline, although the impacts are relatively minor. Meanwhile, a strategy of replacing imported crude oil and natural gas with domestic production using indigenous resources increases gross state product, employment, and tax revenues, with minimal impact on carbon emissions. This option could, therefore, help mitigate the costs of California meeting its RPS commitment. View Full-Text
Keywords: electricity; renewables; natural gas; oil; input-output; employment; carbon electricity; renewables; natural gas; oil; input-output; employment; carbon

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This is an open access article distributed under the Creative Commons Attribution License (CC BY 3.0).

Supplementary material

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    Supplementary Material (PDF, 238 KB)

    Econometric Formulation and Results for California Energy Demand

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MDPI and ACS Style

Considine, T.; Manderson, E. Balancing Fiscal, Energy, and Environmental Concerns: Analyzing the Policy Options for California’s Energy and Economic Future. Energies 2013, 6, 1266-1297.

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