Hot-off-the-press study on Ohio's RPS shows devastating economic resultsMar 03, 2017
COLUMBUS, OH--Early Friday morning, The Buckeye Institute's Economic Research Center (ERC) released its timely new report, The Impact of Renewables Portfolio Standards on the Ohio Economy, which demonstrates the negative economic impact of Ohio's Renewables Portfolio Standards (RPS) on Ohio's economy.
The results of the RPS study are in: If Ohio keeps RPS, tremendous economic damage will follow in its wake long after current policymakers have left office. Accordingly, this study serves as fair warning of impending economic consequences if RPS are not fixed.
By requiring electricity providers to purchase renewable energy credits (RECs), costs continue to increase--causing Ohio businesses and families to pay more for their energy over the next decade. As a result, if RPS is not permanently frozen or repealed outright, the evidence shows that families will suffer from reduced discretionary spending, businesses will hire fewer workers, and Ohio's economic growth will be stunted.
If the renewables standards continue as shown in this new Economic Research Center study, Ohio's economy would suffer from 134,000 fewer job opportunities and the state's GDP will be reduced by $15.5 billion within 10 years. "Ohio workers and families will bear the brunt of the cost for this economically-damaging energy policy, that is RPS," reports The Buckeye Institute's lead economist Orphe Divounguy, Ph.D. "The evidence is overwhelming and convincing: this RPS mandate leads to cost increases that are essentially a tax on productive economic activity. The longer the mandate stays in effect, the more harmful its economic impact will be--as our new study shows very clearly."
The Economic Research Center employed its state-of-the-art and peer-reviewed dynamic growth model of the Ohio economy to simulate the economic effects of the RPS under various policy scenarios. These policy scenarios illustrate what would happen if, for instance, the RPS are permanently frozen at 2016 levels or take full effect. The most positive public policy scenario for Ohio's economy is RPS repeal, which allows the market to determine prices instead of government mandates.
The Buckeye Institute uses publicly available government data, employs sound academic-style research that is peer reviewed, and discloses its assumptions in an effort to be transparent about its methodology. Its Economic Research Center's economic models and calculations have been used and cited extensively in multiple states and relied upon by policymakers since the ERC's inception.
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Founded in 1989, The Buckeye Institute is an independent research and educational institution--a think tank--whose mission is to advance free-market public policy in the states.