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How Good Intentions Backfire: Negative Effects of Federal Environmental Policies

landscape-mountains-nature-rocksOctober 1, 2016


Federal policymakers have been enacting environmental laws for decades to preserve environmental quality and promote human health, but some outcomes from these laws have been economically or environmentally harmful. This report examines how and why negative consequences arise from seemingly good environmental laws.

The report examines the political process of creating environmental policies. Case studies included in the report include:

  • The Wilderness Act
  • The National Environmental Policy Act (NEPA)
  • The Clean Air Act
  • The Clean Water Act
  • The Comprehensive Environmental Response, Compensation and Liability Act (CERCLA)
  • The Energy Policy Act of 2005


The report also includes a section on how market-based approaches to environmental problem-solving could prevent or eliminate the problems resulting from these laws.

Read the Full Report here.

Read the Condensed Report here.

How Good Intentions Backfire: Negative Effects of Federal Environmental Policies

YELLOWSTONE (9 of 45)August 4, 2016


Yellowstone National Park, a beloved icon to Americans and visitors from across the globe, is managed by the National Park Service (NPS). In 2016, the NPS will celebrate the one-hundredth anniversary of its formation under the Organic Act.

Yellowstone has served as the model of park management throughout the world since the NPS began managing in 1916, but current management practices may be producing undesirable outcomes in Yellowstone. Current management practices may be harming ecological and wildlife health, especially the northern range of the park. The National Park Service Organic Act of 1916 charged the NPS to “conserve the scenery and the natural and historic objects and the wildlife” within the national parks to “leave them unimpaired for the enjoyment of future generations.” Over the past century, the NPS has experimented with multiple management schemes in Yellowstone in response to political and public pressures resulting from the vague wording of the Organic Act. These management regimes have affected the physical landscape and wildlife within the park. Under the current hands-off management scheme, called “natural regulation” or “ecological process management,” the NPS may not be fulfilling its mandate to preserve the park unimpaired for future generations.

This report explores Yellowstone using a public choice analysis of the institutions and incentives that have caused the NPS to change management strategies over time. Public choice theory is a field of political economy that explains why and how politicians and bureaucrats make decisions. This report draws on the work of Dr. Charles Kay, a professor at Utah State University, who has spent many years documenting the landscape changes in Yellowstone National Park. Kay and other researchers have documented the ecological changes in great detail, but few researchers have studied the political and bureaucratic roots of these changes.

Download Full Report here.

Download Condensed Report here.


How Good Intentions Backfire: Negative Effects of Federal Environmental Policies


April 21, 2016

The United States has no federal mandate for “renewable” power production, so a majority of states, including Pennsylvania, have created their own state laws called Renewable Portfolio Standards (RPS). These laws require certain renewable sources be included among the overall menu of options from which electricity companies produce power.

Pennsylvania has been known as “The Coal State,” and is home to one of the few major deposits of high-quality anthracite coal in the U.S. At the turn of this century, 57 percent of electricity in Pennsylvania was generated from coal, while 36 percent came from nuclear, 4 percent from other non-renewable sources, and 2 percent from renewable sources. As part of a growing national trend, however, in 2004 legislators passed Pennsylvania’s first Renewable Portfolio Standard (RPS), in an attempt to shift the balance of electricity generation away from coal and toward renewable sources. Read the full report for a more detailed summary of the history behind Pennsylvania’s RPS.

The Utah State University’s Institute of Political Economy report analyzes how the changes in electricity markets caused by RPS alter the functioning of a state’s economy and institutions, with a specific focus on Pennsylvania. The report uses a tax-based model, an empirical analysis, and a survey of legal rules to determine final conclusions.

View Report

Common Questions About Renewable Portfolio Standards (RPS)

Updated April 21, 2016

What is a renewable portfolio standard?

Simply put, an RPS is a state law that mandates a certain percentage of statewide electricity be provided by various government-subsidized, alternative sources of energy production – also known as “renewables.” Many states, like Pennsylvania, Michigan, Kansas, North Carolina, Ohio and Colorado have created their own mandate. Most of these laws require that states attain target percentages of electricity that must be utilized by a certain date.

Why research renewable portfolio standards (RPS)?

Utah State University’s Institute of Political Economy (IPE), does research on a variety of subjects related to energy, environmental and land topics. A number of states have recently implemented their own RPS, which uses a combination of mandates and subsidies to promote renewable energy resources. The study looks at real costs and the impact of economic incentives within the states where RPS has been implemented. We examine the impact on consumers and the prices they pay for energy, the impact on jobs, and other economic consequences of these mandated standards. Our academic focus and standard is to examine a spectrum of economic factors and provide information based on verifiable academic data. We also have ongoing research on a variety of energy sources, including coal, wind, solar, bio-mass, natural gas, and others.

Where do you find data to use in your research?

The RPS study is an academic, peer-reviewed research report intended for public consumption. The bulk of data for our RPS analysis comes from the federal Energy Information Administration (EIA), which is considered the most reliable data publicly available.

How is your research funded?

The Institute of Political Economy receives funding from a variety of sources including individuals, foundations, corporations, and government grants. Our research process is the same, regardless of the funder or topic of our research. Organizations who provide funding, for this or any of our studies, are completely walled-off from the research and the process for the study’s completion. Funding sources do not provide input into how the study is conducted or what conclusions are reached. Our researchers and their teams come up with their own projects and follow a strict focus on empirical, straightforward academic research of the highest quality.

What is your publication process?

Utah State University’s Institute of Political Economy develops questions and ideas that are relevant to the public and policymakers. These questions and ideas are tested according to academic rigor using both time-tested and innovative methodologies. In order to achieve the greatest accuracy and insight, the methods are peer-reviewed and fact checked for accuracy. Our research is intended to be timely and responsive to current issues and trends.

What are the major takeaways of the RPS studies?

The RPS study findings utilize an innovative method of analysis originally developed by the Federal Reserve Bank of Philadelphia. Through econometric analysis and modeling, the methodology isolates the effects of policy mandates like RPS and outputs general impacts. Our findings show that states with RPS have a significantly higher set of negative economic impacts than states without RPS. Specifically, our research shows that across RPS states, industrial production (measured by electricity sales) is greater than a 13% decline. Additionally, real personal income declines in RPS states by almost 4 percent.

What is the Institute of Political Economy (IPE)?

Originally founded by Professor Randy Simmons at Utah State University, The Institute of Political Economy is a research and policy analysis center. IPE has grown to include several scholars interested the intersections between free markets, natural resources, public lands, and energy. Scholars also working with IPE include Dr. Chris Fawson, Dr. Ryan Yonk, and a variety of other professors and experts with expertise in our core areas.

When your first RPS study on the State of Kansas released, and then North Carolina and Ohio afterwards, the wind-industry trade group, AWEA, and others like the Sierra Club, said your methodology was flawed, is that true?

It is not surprising that an industry trade group that represents renewable energy interests would try to rebut the study, however we stand confidently behind the study methodology and validity of the findings. The RPS studies from Utah State University’s Institute of Political Economy use practices and processes that are the industry-standard in the academic research community. The methodology used in each RPS study underwent a double-blind review process. During this verification process, anonymous and unbiased subject-matter experts provided challenges and feedback to study’s authors. Before the process concluded, the authors reconciled each individual challenge and piece of feedback before moving forward with the RPS studies.

How Good Intentions Backfire: Negative Effects of Federal Environmental Policies

Modern energy plant

April 20, 2016

“In the economic sphere an act, a habit, an institution, a law produces not only one effect, but a series of effects. Of these effects, the first alone is immediate; it appears simultaneously with its cause; it is seen. The other effects emerge only subsequently; they are not seen; we are fortunate if we foresee them.” —Frederic Bastiat, 1848


These reports explore both explicit and implicit factors that influence the cost of producing electricity from four different types of energy: coal, natural gas, wind, and solar. The explicit, or seen costs of electricity generated from these sources, include cost components such as power plant development and construction, operation & maintenance, and transmission infrastructure costs. Often overlooked, however, are the implicit costs of energy, caused by government subsidies, mandates, and regulations that distort the electricity market. These reports do not estimate an actual value for the cost of producing electricity , rather, they identify and analyze those factors that policymakers should consider.

Rather than creating a new cost estimate for each of these energy types, we analyze the findings of prominent cost studies by experts in the energy field. Each study includes different factors in its estimate of the cost of power produced from coal, natural gas, wind, and solar. We break down each of these factors and explain their significance within the reports. These factors include: capital costs, operation and maintenance costs, capacity factor, transmission costs, baseload cycling, social and environmental costs, and the cost of government subsidies. Other factors are more difficult to quantify, but nevertheless add to the cost of producing electricity using these sources. Such factors include: opportunity cost of taxpayer dollars, reduced reliability of the grid, and higher electricity prices. We conclude that, when estimating the cost of producing electricity, all of these factors should be included.

The Unseen Costs of Coal Powered Electricity:

Download Full Report here.

Download Condensed Report here.

The Unseen Costs of Natural Gas Powered Electricity:

Download Full Report here.

Download Condensed Report here.

The Unseen Costs of Wind Powered Electricity:

Download Full Report here.

Download Condensed Report here.

The Unseen Costs of Solar Powered Electricity:

Download Full Report here.

Download Condensed Report here.