Supply of renewable energy sources and the cost of EU climate policy
What 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).
If 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.
References listed on IDEAS
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.:
- Stefan Boeters & Ton Manders & Gerard Verweij & M.G.J. den Elzen & Veenendaal. P.J.J., 2007. "Post-2012 climate policy scenarios," CPB Special Publication 70, CPB Netherlands Bureau for Economic Policy Analysis.
- Jc Hourcade & M. Jaccard & C. Bataille & F Ghersi, 2006. "Hybrid modeling: New answers to old challenges - Introduction to the special issue of The Energy Journal," Post-Print hal-00716778, HAL.
- R. G. Lipsey & Kelvin Lancaster, 1956. "The General Theory of Second Best," Review of Economic Studies, Oxford University Press, vol. 24(1), pages 11-32.
- 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.
- Schumacher, Katja & Sands, Ronald D., 2007.
"Where are the industrial technologies in energy-economy models? An innovative CGE approach for steel production in Germany,"
Elsevier, vol. 29(4), pages 799-825, July.
- 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.
- 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.
- 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.
- 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. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:eee:eneeco:v:33:y:2011:i:5:p:1024-1034. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu)
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.