While RPS should positively impact the environment by promoting clean energy use, RPS can also negatively impact the profitability of electric utilities by limiting their energy portfolio choice set.
However, this type of "flexible" regulation may prompt innovation offsets that eventually lead to improved profitability, as articulated by the Porter Hypothesis.
It can be change in the average weather or change in the distribution of events for instance greater or less extreme weather (rain).
Climate change can be a social problem in that it is known to be caused by human activities such as pollution which in turn affects the weather patterns of different regions.
RPS specify the portion of electricity that must stem from renewable energy sources for an electricity operator in a given state.
Even in those states that have adopted RPS, policies have varied greatly and thus can create varying incentives for electric utilities to invest in renewable energy.
The first chapter focuses on one regulatory policy aimed at decreasing greenhouse gas emissions and its impact on the firm it is regulating.
In order to increase the use of renewable energy for electricity generation, a majority of the states in the US have introduced Renewable Portfolio Standards (RPS) over the last two decades.
Global warming threatens to reverse major human progress achieved over the years, causing poverty reduction efforts unachievable.
Industrialized countries have to lead the switch from use of fossil fuel based energy to clean energy.