Supply of renewable energy sources and the cost of EU climate policy
AbstractWhat are the excess costs of a separate 20% target for renewable energy as a part of the EU climate policy for 2020? We answer this question using a computable general equilibrium model, WorldScan, which has been extended with a bottom-up module of the electricity sector. The model set-up makes it possible to base the calibration directly on available estimates of costs and capacity potentials for renewable energy sources. In our base case simulation, the costs of EU climate policy with the renewables target are 6% higher than those of a policy without this target. The uncertainty in this estimate is considerable, however, and depends on our assumptions about the availability of low-cost renewable energy: the initial cost level, the steepness of the supply curves and share of renewable energy in the baseline. Within the range we explore, the excess costs vary from zero (when the target is not a binding constraint) to 32% (when the cost progression and the initial cost disadvantage for renewable energy are high and its initial share is low).
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal Energy Economics.
Volume (Year): 33 (2011)
Issue (Month): 5 (September)
Contact details of provider:
Web page: http://www.elsevier.com/locate/eneco
EU climate policy Renewable energy Computable general equilibrium model;
Other versions of this item:
- Stefan Boeters & J. Koornneef, 2010. "Supply of renewable energy sources and the cost of EU climate policy," CPB Discussion Paper 142, CPB Netherlands Bureau for Economic Policy Analysis.
- Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
- Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters
- D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Resch, Gustav & Held, Anne & Faber, Thomas & Panzer, Christian & Toro, Felipe & Haas, Reinhard, 2008. "Potentials and prospects for renewable energies at global scale," Energy Policy, Elsevier, vol. 36(11), pages 4048-4056, November.
- Jean-Charles Hourcade, Mark Jaccard, Chris Bataille, and Frederic Ghersi , 2006. "Hybrid Modeling: New Answers to Old Challenges Introduction to the Special Issue of The Energy Journal," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 1-12.
- Doukas, Haris & Mannsbart, Wilhelm & Patlitzianas, Konstantinos D. & Psarras, John & Ragwitz, Mario & Schlomann, Barbara, 2007. "A methodology for validating the renewable energy data in EU," Renewable Energy, Elsevier, vol. 32(12), pages 1981-1998.
- Katja Schumacher & Ronald D. Sands, 2006.
"Where Are the Industrial Technologies in Energy-Economy Models?: An Innovative CGE Approach for Steel Production in Germany,"
Discussion Papers of DIW Berlin
605, DIW Berlin, German Institute for Economic Research.
- Schumacher, Katja & Sands, Ronald D., 2007. "Where are the industrial technologies in energy-economy models? An innovative CGE approach for steel production in Germany," Energy Economics, Elsevier, vol. 29(4), pages 799-825, July.
- McFarland, J. R. & Reilly, J. M. & Herzog, H. J., 2004. "Representing energy technologies in top-down economic models using bottom-up information," Energy Economics, Elsevier, vol. 26(4), pages 685-707, July.
- Messner, Sabine & Schrattenholzer, Leo, 2000. "MESSAGE–MACRO: linking an energy supply model with a macroeconomic module and solving it iteratively," Energy, Elsevier, vol. 25(3), pages 267-282.
- Van den Bergh, Kenneth & Delarue, Erik & D'haeseleer, William, 2013. "Impact of renewables deployment on the CO2 price and the CO2 emissions in the European electricity sector," Energy Policy, Elsevier, vol. 63(C), pages 1021-1031.
- Amigues, Jean-Pierre & Chakravorty, Ujjayant & Lafforgue, Gilles & Moreaux, Michel, 2012.
"Renewable Portfolio Standards and implicit tax-subsidy schemes: Structural differences induced by quantity and proportional mandates,"
LERNA Working Papers
12.02.359, LERNA, University of Toulouse.
- Amigues, Jean-Pierre & Chakravorty, Ujjayant & Lafforgue, Gilles & Moreaux, Michel, 2012. "Renewable Portfolio Standards and implicit tax-subsidy schemes: Structural differences induced by quantity and proportional mandates," IDEI Working Papers 698, Institut d'Économie Industrielle (IDEI), Toulouse.
- Amigues, Jean-Pierre & Chakravorty, Ujjayant & Lafforgue, Gilles & Moreaux, Michel, 2012. "Renewable Portfolio Standards and implicit tax-subsidy schemes: Structural differences induced by quantity and proportional mandates," TSE Working Papers 12-278, Toulouse School of Economics (TSE).
- Matthias Kalkuhl & Ottmar Edenhofer & Kai Lessmann, 2011.
"Renewable Energy Subsidies: Second-Best Policy or Fatal Aberration for Mitigation?,"
2011.48, Fondazione Eni Enrico Mattei.
- Kalkuhl, Matthias & Edenhofer, Ottmar & Lessmann, Kai, 2013. "Renewable energy subsidies: Second-best policy or fatal aberration for mitigation?," Resource and Energy Economics, Elsevier, vol. 35(3), pages 217-234.
- Johannes Bollen & Corjan Brink (PBL), 2012. "Air Pollution Policy in Europe: Quantifying the Interaction with Greenhouse Gases and Climate Change Policies," CPB Discussion Paper 220, CPB Netherlands Bureau for Economic Policy Analysis.
- Boeters, Stefan & Bollen, Johannes, 2012.
"Fossil fuel supply, leakage and the effectiveness of border measures in climate policy,"
Elsevier, vol. 34(S2), pages S181-S189.
- Stefan Boeters & Johannes Bollen, 2012. "Fossil Fuel Supply, Leakage and the Effectiveness of Border Measures in Climate Policy," CPB Discussion Paper 215, CPB Netherlands Bureau for Economic Policy Analysis.
- Flues, Florens & Löschel, Andreas & Lutz, Benjamin Johannes & Schenker, Oliver, 2013. "Ups and downs: How economic growth affects policy interactions," ZEW Discussion Papers 13-066, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Jägemann, Cosima, 2012. "Decarbonizing Europe’s power sector by 2050 - Analyzing the implications of alternative decarbonization pathways," EWI Working Papers 2012-13, Energiewirtschaftliches Institut an der Universitaet zu Koeln.
- Jägemann, Cosima & Fürsch, Michaela & Hagspiel, Simeon & Nagl, Stephan, 2013. "Decarbonizing Europe's power sector by 2050 — Analyzing the economic implications of alternative decarbonization pathways," Energy Economics, Elsevier, vol. 40(C), pages 622-636.
- Boeters, Stefan, 2013. "Optimally Differentiated Carbon Prices for Unilateral Climate Policy," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79738, Verein für Socialpolitik / German Economic Association.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.