Changes in the Fuel Mix Used to Produce Power in the U.S., authored by Dr. Michael Canes, documents the changing composition of the U.S. energy supply and discusses the forces driving this transformation.
Dr. Canes observes: “The purpose is to see whether such mix already is being shaped by market forces that are driving it towards lower carbon content. If so, question arises whether there is any need for policy measures such as Renewable Portfolio Standards or subsidies for non-carbon sources. Further, as mandates or subsidies have substantial costs, question arises whether these costs are justified.”
The paper reviews recent trends in energy use, price movements, and the carbon intensity of the United States. Canes also considers public policy choices at the state and federal levels that influence fuel mix decisions.
Canes finds that “Markets already are responding to price signals in such a way as to yield a less carbon intensive power mix, and projections indicate this is likely to continue.”
“Dr. Canes’ paper demonstrates the folly of government attempts to legislate targets and time tables for the development and deployment of energy technologies,” Institute CEO William O’Keefe observed.
“The paper clearly shows that market forces and innovation are a better way to achieve energy and environmental objectives,” O’Keefe concludes. “The long-term decline in carbon intensity provides strong evidence of that view.”