The role of social, political, and economic interests in promoting state green electricity policies

Abstract

Abstract State governments in the United States have adopted a number of policies to encourage the production of electricity from “green” energy sources. While these state-level policies have been shown to stimulate green electricity development, the rate at which such policies have been adopted by the states differs significantly. This paper examines the potential influence of a state's particular social, political, and economic interests on its propensity to adopt green electricity policies. We use an empirical model that combines various social, political and economic indicators as explanatory variables of a state's likelihood to adopt four specific green electricity policies: renewable portfolio standards, net metering rules, public benefits funds, and generation disclosure rules. Using binary logistics regressions, the results suggest that social interests, measured by the level of income, the level of education, and the degree of participation in environmental lobbying groups, are positively linked to the adoption of green electricity policies. Similarly, political interests as measured by the pro-environment voting by states’ representatives in the U.S. Congress, also play a positive role in the adoption of such policies.