Are green hopes too rosy? Employment and welfare impacts of renewable energy promotion
In view of pressing unemployment problems, policy makers across all parties jump on the prospects of renewable energy promotion as a job creation engine which can boost economic well-being. Our analytical model shows that initial labor market rigidities in theory provide some scope for such a double dividend. However, the practical outcome of renewable energy promotion might be sobering. Our computable general equilibrium analysis of subsidized electricity production from renewable energy sources (RES-E) in Germany suggests that the prospects for employment and welfare gains are quite limited and hinge crucially on the level of the subsidy rate and the financing mechanism. If RES-E subsidies are financed by labor taxes, welfare and employment effects are strictly negative for a broad range of subsidy rates. The use of an electricity tax to fund RES-E subsidies generates minor benefits for small subsidy rates but these benefits quickly turn into significant losses as the subsidy rate exceeds some threshold value.
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.:
- Christoph Böhringer & Thomas F. Rutherford, 2010. "The Costs of Compliance: A CGE Assessment of Canada's Policy Options under the Kyoto Protocol," The World Economy, Wiley Blackwell, vol. 33(2), pages 177-211, 02.
- Ulrike Lehr & Marlene Kratzat, "undated".
"Renewable Energy and Employment in Germany,"
Energy and Environmental Modeling 2007
- Victor R. Fuchs & Alan B. Krueger & James M. Poterba, 1998. "Economists' Views about Parameters, Values, and Policies: Survey Results in Labor and Public Economics," Journal of Economic Literature, American Economic Association, vol. 36(3), pages 1387-1425, September.
- Ernst Fehr & Lorenz Götte, 2000.
"Robustness and Real Consequences of Nominal Wage Rigidity,"
CESifo Working Paper Series
335, CESifo Group Munich.
- Fehr, Ernst & Goette, Lorenz, 2005. "Robustness and real consequences of nominal wage rigidity," Journal of Monetary Economics, Elsevier, vol. 52(4), pages 779-804, May.
- Fehr, Ernst & Götte, Lorenz, 2007. "Robustness and Real Consequences of Nominal Wage Rigidity," Kiel Working Papers 1343, Kiel Institute for the World Economy (IfW).
- Ernst Fehr & Lorenz Goette, 2004. "Robustness And Real Consequences Of Nominal Wage Rigidity," Macroeconomics 0409025, EconWPA.
- Ernst Fehr & Lorenz Goette, "undated". "Robustness and Real Consequences of Nominal Wage Rigidity," IEW - Working Papers 044, Institute for Empirical Research in Economics - University of Zurich.
- Stephen Nickell & Glenda Quintini, 2001.
"Nominal Wage Rigidity and the Rate of Inflation,"
CEP Discussion Papers
dp0489, Centre for Economic Performance, LSE.
- Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-444, June.
- Baltagi, Badi H. & Blien, Uwe, 1998. "The German wage curve: evidence from the IAB employment sample," Economics Letters, Elsevier, vol. 61(2), pages 135-142, November.
- Edwin van der Werf, 2007.
"Production Functions for Climate Policy Modeling: An Empirical Analysis,"
2007.47, Fondazione Eni Enrico Mattei.
- van der Werf, Edwin, 2008. "Production functions for climate policy modeling: An empirical analysis," Energy Economics, Elsevier, vol. 30(6), pages 2964-2979, November.
- Céline Guivarch, 2010.
"The costs of climate policies in a second best world with labour market imperfections,"
- Céline Guivarch & Renaud Crassous & Olivier Sassi & Stéphane Hallegatte, 2011. "The costs of climate policies in a second-best world with labour market imperfections," Climate Policy, Taylor & Francis Journals, vol. 11(1), pages 768-788, January.
- Céline Guivarch & Renaud Crassous & Olivier Sassi & Stéphane Hallegatte, 2011. "The costs of climate policies in a second best world with labour market imperfections," Post-Print halshs-00724487, HAL.
- Fischer, Carolyn & Preonas, Louis, 2010.
"Combining Policies for Renewable Energy: Is the Whole Less than the Sum of Its Parts?,"
dp-10-19, Resources For the Future.
- Fischer, Carolyn & Preonas, Louis, 2010. "Combining Policies for Renewable Energy: Is the Whole Less Than the Sum of Its Parts?," International Review of Environmental and Resource Economics, now publishers, vol. 4(1), pages 51-92, June.
- Krichene, Noureddine, 2002. "World crude oil and natural gas: a demand and supply model," Energy Economics, Elsevier, vol. 24(6), pages 557-576, November.
- Frondel, Manuel & Ritter, Nolan & Schmidt, Christoph M. & Vance, Colin, 2010.
"Economic impacts from the promotion of renewable energy technologies: The German experience,"
Elsevier, vol. 38(8), pages 4048-4056, August.
- Frondel, Manuel & Ritter, Nolan & Schmidt, Christoph M. & Vance, Colin, 2009. "Economic Impacts from the Promotion of Renewable Energy Technologies - The German Experience," Ruhr Economic Papers 156, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
- Wagner, Joachim, 1994. "German wage curves, 1979-1990," Economics Letters, Elsevier, vol. 44(3), pages 307-311.
- Blanchflower, David G & Oswald, Andrew J, 1994. "Estimating a Wage Curve for Britain: 1973-90," Economic Journal, Royal Economic Society, vol. 104(426), pages 1025-1043, September.
- Christoph Böhringer & Andreas Löschel & Heinz Welsch, 2008. "Environmental Taxation and Induced Structural Change in an Open Economy: The Role of Market Structure," German Economic Review, Verein für Socialpolitik, vol. 9, pages 17-40, 02.
- David G. Blanchflower & Andrew J. Oswald, 1994. "Estimating a Wage Curve for Britain 1973-1990," NBER Working Papers 4770, National Bureau of Economic Research, Inc.
- David G. Blanchflower & Andrew J. Oswald, 1995. "An Introduction to the Wage Curve," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 153-167, Summer.
- Bohringer, Christoph & Rutherford, Thomas F., 2008. "Combining bottom-up and top-down," Energy Economics, Elsevier, vol. 30(2), pages 574-596, March.
- Peter Nijkamp & Jacques Poot, 2002.
"The Last Word on the Wage Curve?,"
Tinbergen Institute Discussion Papers
02-029/3, Tinbergen Institute, revised 13 Mar 2003.
- Hillebrand, Bernhard & Buttermann, Hans Georg & Behringer, Jean Marc & Bleuel, Michaela, 2006. "The expansion of renewable energies and employment effects in Germany," Energy Policy, Elsevier, vol. 34(18), pages 3484-3494, December.
- Michiel Evers & Ruud Mooij & Daniel Vuuren, 2008. "The Wage Elasticity of Labour Supply: A Synthesis of Empirical Estimates," De Economist, Springer, vol. 156(1), pages 25-43, March.
- Christoph Böhringer & Knut Einar Rosendahl, 2011. "Greening Electricity More Than Necessary: On the Cost Implications of Overlapping Regulation in EU Climate Policy," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 131(3), pages 469-492.
- Graham, Paul & Thorpe, Sally & Hogan, Lindsay, 1999. "Non-competitive market behaviour in the international coking coal market," Energy Economics, Elsevier, vol. 21(3), pages 195-212, June.
- Carolyn Fischer, 2010. "Renewable Portfolio Standards: When Do They Lower Energy Prices?," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 101-120.
- Layard, Richard & Nickell, Stephen, 1986. "Unemployment in Britain," Economica, London School of Economics and Political Science, vol. 53(210(S)), pages 121-169, Supplemen.
When requesting a correction, please mention this item's handle: RePEc:eee:eneeco:v:36:y:2013:i:c:p:277-285. 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.