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

Abstract

Methane is the second most prevalent greenhouse gas and has a global warming potential at least 28 times as high as carbon dioxide. Municipal solid waste landfills are reported to be the third-largest source of anthropogenic methane emissions in the United States, responsible for 18 percent of emissions in 2011. Capturing landfill gas 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 projects. Our research provides the first systematic economic assessment of the role these policies play in 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 have led to 12.5 million metric tons of carbon dioxide-equivalent 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