Bioenergy governance between market and government failures: A new institutional economics perspective
AbstractBioenergy can play an important part in managing the transition towards a lowcarbon energy system. However, in many countries its rapid expansion increases pressures on agricultural land use and natural ecosystems, resulting in conflicts with conservation aims and food security. Establishing an effective governance framework for bioenergy, to safeguard against sustainability risks and promote the efficient use of scarce biomass resources, is of the utmost importance, but is complicated by the existence of multiple objectives, multiple market failures and the variety of possible value chains. In this situation, policy recommendations based on neoclassical assumptions prove too abstract to be of practical relevance. Using the case of European bioenergy policy, this paper explores how economic bioenergy policy recommendations could be improved by using a new institutional economics (NIE) perspective. Moving along the value chain, we discuss what implications the consideration of transaction costs, incomplete information, path dependencies, and political feasibility has for finding solutions to the governance challenges of bioenergy. We conclude that policy implications derived from NIE differ clearly both from neoclassical recommendations and current EU bioenergy policy, and that a NIE framework for the analysis of bioenergy governance, which takes not only market failures, but also the risks of government failures into account, could make a useful contribution to the development of realistic, second-best solutions to the allocative problems of bioenergy use. --
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.
Bibliographic InfoPaper provided by Helmholtz Centre for Environmental Research (UFZ), Division of Social Sciences (ÖKUS) in its series UFZ Discussion Papers with number 13/2012.
Date of creation: 2012
Date of revision:
Contact details of provider:
Postal: Permoserstraße 15, 04318 Leipzig
Phone: ++49 - 0341 - 235-2771
Fax: ++49 - 0341 - 235-2825
Web page: http://www.ufz.de/index.php?en=1445
More information through EDIRC
bioenergy policy; renewable energy policy; climate change mitigation; new institutional economics;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-10-13 (All new papers)
- NEP-ENE-2012-10-13 (Energy Economics)
- NEP-ENV-2012-10-13 (Environmental Economics)
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.:
- Di Lucia, Lorenzo, 2010. "External governance and the EU policy for sustainable biofuels, the case of Mozambique," Energy Policy, Elsevier, vol. 38(11), pages 7395-7403, November.
- Lehmann, Paul & Gawel, Erik, 2013.
"Why should support schemes for renewable electricity complement the EU emissions trading scheme?,"
Elsevier, vol. 52(C), pages 597-607.
- Lehmann, Paul & Gawel, Erik, 2011. "Why should support schemes for renewable electricity complement the EU emissions trading scheme?," UFZ Discussion Papers 5/2011, Helmholtz Centre for Environmental Research (UFZ), Division of Social Sciences (ÖKUS).
- Krutilla, Kerry & Krause, Rachel, 2011. "Transaction Costs and Environmental Policy: An Assessment Framework and Literature Review," International Review of Environmental and Resource Economics, now publishers, vol. 4(3â4), pages 261-354, April.
- Dahlman, Carl J, 1979. "The Problem of Externality," Journal of Law and Economics, University of Chicago Press, vol. 22(1), pages 141-62, April.
- van Dam, J. & Junginger, M. & Faaij, A.P.C., 2010. "From the global efforts on certification of bioenergy towards an integrated approach based on sustainable land use planning," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(9), pages 2445-2472, December.
- Dieter Helm, 2010. "Government failure, rent-seeking, and capture: the design of climate change policy," Oxford Review of Economic Policy, Oxford University Press, vol. 26(2), pages 182-196, Summer.
- Paul Lehmann & Felix Creutzig & Melf-Hinrich Ehlers & Nele Friedrichsen & Clemens Heuson & Lion Hirth & Robert Pietzcker, 2012. "Carbon Lock-Out: Advancing Renewable Energy Policy in Europe," Energies, MDPI, Open Access Journal, vol. 5(2), pages 323-354, February.
- Unruh, Gregory C., 2000. "Understanding carbon lock-in," Energy Policy, Elsevier, vol. 28(12), pages 817-830, October.
- Akerlof, George A, 1970. "The Market for 'Lemons': Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, MIT Press, vol. 84(3), pages 488-500, August.
- Dieter Helm & Cameron Hepburn & Richard Mash, 2003. "Credible Carbon Policy," Oxford Review of Economic Policy, Oxford University Press, vol. 19(3), pages 438-450.
- Dieter Helm, 2003. "The Assessment: Climate-Change Policy," Oxford Review of Economic Policy, Oxford University Press, vol. 19(3), pages 349-361.
- David Anthoff & Robert Hahn, 2010.
"Government failure and market failure: on the inefficiency of environmental and energy policy,"
Oxford Review of Economic Policy,
Oxford University Press, vol. 26(2), pages 197-224, Summer.
- Anthoff, David & Hahn, Robert W., 2009. "Government Failure and Market Failure: On the Inefficiency of Environmental and Energy Policy," Working paper 6, Regulation2point0.
- Lori Bennear & Robert Stavins, 2007. "Second-best theory and the use of multiple policy instruments," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 37(1), pages 111-129, May.
- Junginger, Martin & van Dam, Jinke & Zarrilli, Simonetta & Ali Mohamed, Fatin & Marchal, Didier & Faaij, Andre, 2011. "Opportunities and barriers for international bioenergy trade," Energy Policy, Elsevier, vol. 39(4), pages 2028-2042, April.
- Schubert, Renate & Blasch, Julia, 2010. "Sustainability standards for bioenergy--A means to reduce climate change risks?," Energy Policy, Elsevier, vol. 38(6), pages 2797-2805, June.
- Lange, Mareike, 2011. "The GHG balance of biofuels taking into account land use change," Energy Policy, Elsevier, vol. 39(5), pages 2373-2385, May.
- Scarlat, Nicolae & Dallemand, Jean-François, 2011. "Recent developments of biofuels/bioenergy sustainability certification: A global overview," Energy Policy, Elsevier, vol. 39(3), pages 1630-1646, March.
- M. L. Weitzman, 1973.
"Prices vs. Quantities,"
106, Massachusetts Institute of Technology (MIT), Department of Economics.
- Manuel Frondel & Nolan Ritter & Christoph M. Schmidt & Colin Vance, 2009.
"Economic Impacts from the Promotion of Renewable Energy Technologies - The German Experience,"
Ruhr Economic Papers
0156, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
- Frondel, Manuel & Ritter, Nolan & Schmidt, Christoph M. & Vance, Colin, 2010. "Economic impacts from the promotion of renewable energy technologies: The German experience," Energy Policy, Elsevier, vol. 38(8), pages 4048-4056, August.
- Richard G. Newell, 2010. "The role of markets and policies in delivering innovation for climate change mitigation," Oxford Review of Economic Policy, Oxford University Press, vol. 26(2), pages 253-269, Summer.
- Pizer, William A., 1999. "The optimal choice of climate change policy in the presence of uncertainty," Resource and Energy Economics, Elsevier, vol. 21(3-4), pages 255-287, August.
- Finon, Dominique & Perez, Yannick, 2007. "The social efficiency of instruments of promotion of renewable energies: A transaction-cost perspective," Ecological Economics, Elsevier, vol. 62(1), pages 77-92, April.
- Hahn, Robert W., 1999.
"The Impact of Economics on Environmental Policy,"
- Stavins, Robert & Jaffe, Adam & Newell, Richard, 2004.
"A Tale of Two Market Failures: Technology and Environmental Policy,"
dp-04-38, Resources For the Future.
- Jaffe, Adam B. & Newell, Richard G. & Stavins, Robert N., 2005. "A tale of two market failures: Technology and environmental policy," Ecological Economics, Elsevier, vol. 54(2-3), pages 164-174, August.
- Menanteau, Philippe & Finon, Dominique & Lamy, Marie-Laure, 2003. "Prices versus quantities: choosing policies for promoting the development of renewable energy," Energy Policy, Elsevier, vol. 31(8), pages 799-812, June.
- Kopmann, Angela & Kretschmer, Bettina & Lange, Mareike, 2009. "Effiziente Nutzung von Biomasse durch einen globalen Kohlenstoffpreis Empfehlungen für eine koordinierte Bioenergiepolitik," Kiel Policy Brief 14, Kiel Institute for the World Economy (IfW).
- Berndes, Goran & Hansson, Julia, 2007. "Bioenergy expansion in the EU: Cost-effective climate change mitigation, employment creation and reduced dependency on imported fuels," Energy Policy, Elsevier, vol. 35(12), pages 5965-5979, December.
- Faber, Malte, 2008. "How to be an ecological economist," Ecological Economics, Elsevier, vol. 66(1), pages 1-7, May.
- Lesser, Jonathan A. & Su, Xuejuan, 2008. "Design of an economically efficient feed-in tariff structure for renewable energy development," Energy Policy, Elsevier, vol. 36(3), pages 981-990, March.
- Lange, Mareike, 2011. "The GHG Balance of Biofuels Taking into Account Land Use Change (Power Point)," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114406, European Association of Agricultural Economists.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics).
If references are entirely missing, you can add them using this form.