We assess different policy options for reducing greenhouse gas emissions and promoting the development and diffusion of renewable energy technologies: (1) a carbon emissions price, (2) a generation subsidy for renewable energy, (3) a tax on fossil fuel generated energy, (4) a portfolio (market share) requirement for renewable energy sources, (5) a tradable performance standard for the emissions intensity of all generation, and (6) a subsidy for R&D investment in renewable energy technology. We evaluate the relative performance of the different policies according to different potential goals: emissions reduction, renewable energy production, R&D, and welfare. We also assess how the nature of technological progress—whether it occurs [...]
