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Follow the sun! How investments in solar power plants in Sicily can generate high returns of investments and help to prevent global warming

Author

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  • Schinke, Jan Christian

Abstract

Germany could have reached Kyoto protocol obligations earlier if German solar investments would be relocated to Sicily. Additional benefits of emission savings and energy production should rise up to 72%. Nevertheless German solar power plants 2008 counted for 20 % of the financial benefits through support mechanisms EEG for renewable energies while the share at produced green energy was not more than 4,8%. The system seems absurd from an economical view, but is adopted in many other countries. Firstly, the paper will analyse general economic theories to underline the importance of financial supports for renewable energies and why policy maker can justify the subsidies for selected technologies through social costs effected by carbon exhaust. Secondly, place does matter and physics are the limit: the following chosen approach for expected final yield shrinks the additional benefits of the theoretical relocated south solar investments to +37%. Thirdly, the conclusions give political recommendations for the design of further subsidies of solar energies in Europe.

Suggested Citation

  • Schinke, Jan Christian, 2010. "Follow the sun! How investments in solar power plants in Sicily can generate high returns of investments and help to prevent global warming," University of Göttingen Working Papers in Economics 105, University of Goettingen, Department of Economics.
  • Handle: RePEc:zbw:cegedp:105
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    More about this item

    Keywords

    Photovoltaics; Renewable Energies; Feed in Tariffs; Carbon Exhausts; Global Warming; European Energy Policies;
    All these keywords.

    JEL classification:

    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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