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In the July issue of Wiley journal Climate and Energy, NERA Senior Managing Director Dr. Jeff D. Makholm and Senior Consultant Andrew Busey explore state-based energy transition efforts. A handful of US states have passed legislation to start energy transition efforts in their own jurisdictions, yet large US states are relatively small political entities. A contrast between global climate change and local democratic action prompts important questions related to energy transition actions in limited jurisdictions and how limited political entities may deal individually with the costs versus benefits of such new legislation.

The US is alone among modern democracies to have relied on investors to supply essentially the whole of its energy production, transport, and local public service infrastructure from the start. The unique reliance on investor-driven energy supply systems has been a tremendous success to date—saving US consumers and businesses trillions of dollars in energy supply costs compared to their European counterparts in the past dozen years.

In their article, Dr. Makholm and Mr. Busey use two different and more tangible perspectives to examine the energy transition of US states. First, who presses for state-based energy transition policies? Second, what is involved in measuring state-level costs and benefits? The authors note that state-based transition policies all but guarantee that, from the local perspective, costs will exceed benefits. If cost-benefit analyses accompanying state-based energy transition measures are to be useful, they must respect such distinct measurements related to the economic analysis of prospective policies. The authors comment on state-based efforts individually to promote the energy transition and the importance of such inquiries to have useful representation for all interest groups. 

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