Policy Research

Michigans RPS ballot defeat: A policy failure or success?

Fei Li, Barry D. Solomon, Adam M. Wellstead

Summary

This article examines what constitutes a policy failure and how policy failure can be evaluated by looking at the 2012 failure of Proposal 3, which was a constitutional amendment that would have mandated that 25% of the State’s electricity must come from renewable resources by 2015. Specifically, through implementation of a renewable portfolio standard (RPS), Proposal 3 would have required energy suppliers generate a certain amount of electricity from qualified renewable energy sources. The article provides background to Michigan’s existing RPS, presents an ex-ante cost-benefit evaluation of the defeated RPS proposal, and determines that RPS can fail in four key ways.

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Policy Implications

This article may be useful in exploring the broader policy implications of Michigan’s RPS in three main areas: program, process, and politics. From a program perspective, the authors find that Michigan’s renewable energy policy is successful in the sense that existing implementation of 10% RPS is consistent with broader policy goals in spite of the failure of Proposal 3 because the public supports renewable expansion. As a process, renewable energy policy is successful but not particularly innovative. Finally, the authors find that political considerations were relatively minor however; the Governor’s lack of support for the renewable ballot initiative reflected a larger dissatisfaction with the entire ballot proposal process during the election. Where CBA of an RPS can be useful, its value should be considered in the context of the political process of making energy policy decisions.