"In November 2009, Harvard became the largest single-institution buyer of wind power in New England when it announced that more than 10 percent of electricity used by its Cambridge and Allston campuses would come from a wind farm in Maine. Meanwhile, improvements to Harvard’s Blackstone Steam Plant, which generates electricity for the University, have made it 31 percent less GHG-intensive since 2006. Harvard’s two chilled water plants are now 19 percent less GHG-intensive than they were in 2006."
To an economist, the funny feature of the article is that it never mentions the cost of "going green". As Harvard retrofits existing buildings, builds new buildings, and purchases green power --- what is the marginal cost of "going green" versus "staying brown"?
This is a nice transition to Exhibit #2 from the Wall Street Journal. This piece is a bit over the top as it argues that Europe is bankrupting itself due to the pursuit of being "low carbon". Yes, the green push raises electricity prices but we need to have an honest discussion of "by how much" and "who bears the incidence of these policies". On this point, the NY Times had a really strong piece yesterday where it acknowledged a point that Frank Wolak has been making for a while.
If educated wealthy Californians install solar panels and "get off the grid", who pays for the subsidies that they solar power installers received and who pays the fixed costs for the existing power generation infrastructure? The awkward answer is that poor people pay this so there is a redistribution from the poor to the wealthy embedded in the incentives and cost recovering rules. Here is a quote.
"Even some consumer advocates who frequently challenge the utilities are arguing that it is time to rethink the generous rate structure, which was initially put in place to encourage the industry at a time when solar systems were far more expensive to install. With those costs down, it now takes much less time to pay off the investment.
“The goal of net metering should not be to give the shortest possible payback period; we’re not trying to shower people with free money,” said Matthew Freedman, a lawyer at the Utility Reform Network, a California advocacy group that works on behalf of residential ratepayers. “We want to make it a reasonable investment while protecting the interests of all the other customers on the system who have to pay for it.”
