How Has the Speed of Energy Transitions Changed in the Past 50 Years? Evidence from the U.S. Electricity Sector

Abstract

The electricity sector is the largest emitter of carbon and greenhouse gases in the U.S. Previous research has proposed a number of policies to decarbonize the electricity sector and promote the use of renewable energy. Yet, previous work in this area is often based on the assumption that the ease of substitution between renewable energy and fossil fuel is constant over time, thereby ignoring the rapid growth of renewable energy in the recent years. The goal of this project is to investigate how the transition from renewable energy to fossil fuel has changed over time and across regions and to evaluate the effectiveness of various environmental policies in decarbonizing the electricity sector. The empirical results suggest that the speed of transition between renewable energy and fossil fuel has increased over time, however, this speed varies across different types of renewable energy. Thus, environmental policies should consider the specific characteristics of each energy source, in order to effectively promote the use of renewable energy in the electricity sector.