Assessing the Role of Renewable Energy Policies in Landfill Gas to Energy Projects

Abstract

Methane (CH4) is the second most prevalent greenhouse gas and has a global warming potential at least 28 times as high as Carbon Dioxide (CO2). In the United States, Municipal Solid Waste (MSW) landfills are reported to be the third-largest source of human-made methane emissions, responsible for 18% of methane emissions in 2011. Capturing landfill gas (LFG) for use as an energy source for electricity or heat produces alternative energy as well as environmental benefits. A host of federal and state policies encourage the development of landfill gas to energy (LFGE) projects. This research provides the first systematic economic assessment of the role of these policies on adoption decisions. Results suggest that Renewable Portfolio Standards and investment tax credits have contributed to the development of these projects, accounting for 13 of 277 projects during our data period from 1991 to 2010. These policy-induced projects lead to 12.5 MMTCO2e reductions in greenhouse gas emissions and a net benefit of $52.59 million.

Keywords: Renewable energy, landfill methane, renewable portfolio standards, investment tax credit

JEL Classification: Q48, Q53