Tradable Green Certificates as a Policy Instrument? A Discussion on the Case of Poland
AbstractQuota obligation schemes based on tradable green certificates have become a popular policy instrument to expand power generation from renewable energy sources (RES). Their application, however, can neither be justified as a first-best response to a market failure, nor, in a second-best sense, as an instrument mitigating distortionary effects of the emissions externality, if an emissions trading system exists that fully covers the energy industry. We study how ancillary reasons, in form of overcoming various barriers for RES use and establishing beneficial side-effects, such as industry development, energy security, and abatement of pollutants not covered under the ETS, apply to the scheme recently introduced in Poland. While setting substantial expansion incentives, an advantage for local industry or job-market development or energy security can hardly be seen. With rising power prices for end consumers and awareness that the extra rents from the schemes mostly accrue to foreign investors and renewable and polluting generators, we expect a negative impact on social acceptance for RES and RES deployment support policies.
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Bibliographic InfoPaper provided by Australian National University, Environmental Economics Research Hub in its series Research Reports with number 95068.
Date of creation: Mar 2010
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tradable green certificates; environmental policy; Poland; Resource /Energy Economics and Policy;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-11-13 (All new papers)
- NEP-ENE-2010-11-13 (Energy Economics)
- NEP-ENV-2010-11-13 (Environmental Economics)
- NEP-EUR-2010-11-13 (Microeconomic European Issues)
- NEP-MIC-2010-11-13 (Microeconomics)
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