Buckeye Institute Study: Ohio’s Green Energy Mandate Is Bad Economics

By statute, Ohio regulators operate a Soviet-style production quota for renewable energy that gradually increases the mandatory supply requirements to 12.5% of all sales by 2025. The Economic Research Center (ERC) at The Buckeye Institute analyzed the likely economic impacts of the state’s green energy mandate by applying the ERC’s proprietary dynamic model of Ohio’s economy. When the mandate is fully implemented, Ohio would suffer 134,100 fewer jobs and a loss of $15.5 billion in GDP by 2026 due to higher electricity prices. Even in the best case scenario—in which policymakers immediately and indefinitely freeze the mandates at 2016 levels—the state’s green energy production quota will still cause employment opportunities to decline by 6,800 jobs and a loss of $806 million in GDP by 2026.

The Buckeye Institute’s Policy Report is timely, as the legislature has demonstrated a willingness to rethink the state’s green energy mandate. The Ohio General Assembly temporarily froze the rate increase in 2014, but Governor Kasich vetoed legislation that would have suspended the rates indefinitely. The findings of this report support repealing the mandates entirely. The authors are Orphe Divounguy, Ph.D., Rea S. Hederman Jr., Joe Nichols, and Lukas Spitzwieser.