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US state carbon intensities are highly heterogeneous, and few studies have been aimed at identifying the causes of these differences among states. Determining the factors that enable certain states to develop their economies on a less carbon-intensive trajectory can give us insight into how those state characteristics or policies can be replicated to achieve lower carbon intensities in other economies. Our study finds that renewable portfolio standards (RPS) have already had a negative and significant impact on carbon intensities through their influence on state electricity prices. Additionally, we show that the adoption of RPS reduced overall US carbon emissions by 4 percent by 2010.