IDEAS home Printed from https://ideas.repec.org/a/eee/eneeco/v54y2016icp272-280.html
   My bibliography  Save this article

Renewable energy policy performance in reducing CO2 emissions

Author

Listed:
  • Pérez de Arce, Miguel
  • Sauma, Enzo
  • Contreras, Javier

Abstract

The growth of fossil fuel power production and the consequent increase in the level of carbon dioxide (CO2) emissions have set off an alarm signal worldwide. Different policies have been implemented to incentivize the development of renewable energy sources with the goal of reducing CO2 emissions. Notwithstanding the different policies contribute to reduce greenhouse gas emissions through the incentives provided for renewable energy, a relevant question is which of these is the most efficient. However, within the context of oligopolistic competition, the answer is very sensitive to the operation of the system. In particular, significant changes in the results can be observed when considering or ignoring reserve constraints.

Suggested Citation

  • Pérez de Arce, Miguel & Sauma, Enzo & Contreras, Javier, 2016. "Renewable energy policy performance in reducing CO2 emissions," Energy Economics, Elsevier, vol. 54(C), pages 272-280.
    • Handle: RePEc:eee:eneeco:v:54:y:2016:i:c:p:272-280
    DOI: 10.1016/j.eneco.2015.11.024
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0140988315003527
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eneco.2015.11.024?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Oikonomou, V. & Flamos, A. & Gargiulo, M. & Giannakidis, G. & Kanudia, A. & Spijker, E. & Grafakos, S., 2011. "Linking least-cost energy system costs models with MCA: An assessment of the EU renewable energy targets and supporting policies," Energy Policy, Elsevier, vol. 39(5), pages 2786-2799, May.
    2. Wood, Geoffrey & Dow, Stephen, 2011. "What lessons have been learned in reforming the Renewables Obligation? An analysis of internal and external failures in UK renewable energy policy," Energy Policy, Elsevier, vol. 39(5), pages 2228-2244, May.
    3. Kitzing, Lena, 2014. "Risk implications of renewable support instruments: Comparative analysis of feed-in tariffs and premiums using a mean–variance approach," Energy, Elsevier, vol. 64(C), pages 495-505.
    4. Oak, Neeraj & Lawson, Daniel & Champneys, Alan, 2014. "Performance comparison of renewable incentive schemes using optimal control," Energy, Elsevier, vol. 64(C), pages 44-57.
    5. Jenner, Steffen & Groba, Felix & Indvik, Joe, 2013. "Assessing the strength and effectiveness of renewable electricity feed-in tariffs in European Union countries," Energy Policy, Elsevier, vol. 52(C), pages 385-401.
    6. Ortega, Margarita & del Río, Pablo & Montero, Eduardo A., 2013. "Assessing the benefits and costs of renewable electricity. The Spanish case," Renewable and Sustainable Energy Reviews, Elsevier, vol. 27(C), pages 294-304.
    7. Johnston, Angus & Kavali, Amalia & Neuhoff, Karsten, 2008. "Take-or-pay contracts for renewables deployment," Energy Policy, Elsevier, vol. 36(7), pages 2481-2503, July.
    8. Berry, Trent & Jaccard, Mark, 2001. "The renewable portfolio standard:: design considerations and an implementation survey," Energy Policy, Elsevier, vol. 29(4), pages 263-277, March.
    9. Palmer, Karen & Burtraw, Dallas, 2005. "Cost-effectiveness of renewable electricity policies," Energy Economics, Elsevier, vol. 27(6), pages 873-894, November.
    10. Klessmann, Corinna & Held, Anne & Rathmann, Max & Ragwitz, Mario, 2011. "Status and perspectives of renewable energy policy and deployment in the European Union—What is needed to reach the 2020 targets?," Energy Policy, Elsevier, vol. 39(12), pages 7637-7657.
    11. Lipp, Judith, 2007. "Lessons for effective renewable electricity policy from Denmark, Germany and the United Kingdom," Energy Policy, Elsevier, vol. 35(11), pages 5481-5495, November.
    12. Couture, Toby & Gagnon, Yves, 2010. "An analysis of feed-in tariff remuneration models: Implications for renewable energy investment," Energy Policy, Elsevier, vol. 38(2), pages 955-965, February.
    13. Lewis, Joanna I. & Wiser, Ryan H., 2007. "Fostering a renewable energy technology industry: An international comparison of wind industry policy support mechanisms," Energy Policy, Elsevier, vol. 35(3), pages 1844-1857, March.
    14. Schallenberg-Rodriguez, Julieta, 2014. "Renewable electricity support system: Design of a variable premium system based on the Spanish experience," Renewable Energy, Elsevier, vol. 68(C), pages 801-813.
    15. Francisco Munoz & Enzo Sauma & Benjamin Hobbs, 2013. "Approximations in power transmission planning: implications for the cost and performance of renewable portfolio standards," Journal of Regulatory Economics, Springer, vol. 43(3), pages 305-338, June.
    16. Enzo Sauma & Shmuel Oren, 2006. "Proactive planning and valuation of transmission investments in restructured electricity markets," Journal of Regulatory Economics, Springer, vol. 30(3), pages 358-387, November.
    17. Laird, Frank N. & Stefes, Christoph, 2009. "The diverging paths of German and United States policies for renewable energy: Sources of difference," Energy Policy, Elsevier, vol. 37(7), pages 2619-2629, July.
    18. Philippe Menanteau & Dominique Finon & Marie-Laure Lamy, 2003. "Prices versus quantities :environmental policies for promoting the development of renewable energy," Post-Print halshs-00480457, HAL.
    19. Stokes, Leah C., 2013. "The politics of renewable energy policies: The case of feed-in tariffs in Ontario, Canada," Energy Policy, Elsevier, vol. 56(C), pages 490-500.
    20. Robert Wilson, 2002. "Architecture of Power Markets," Econometrica, Econometric Society, vol. 70(4), pages 1299-1340, July.
    21. Woodman, B. & Mitchell, C., 2011. "Learning from experience? The development of the Renewables Obligation in England and Wales 2002-2010," Energy Policy, Elsevier, vol. 39(7), pages 3914-3921, July.
    22. Hinrichs-Rahlwes, Rainer, 2013. "Renewable energy: Paving the way towards sustainable energy security," Renewable Energy, Elsevier, vol. 49(C), pages 10-14.
    23. Rowlands, Ian H., 2005. "Envisaging feed-in tariffs for solar photovoltaic electricity: European lessons for Canada," Renewable and Sustainable Energy Reviews, Elsevier, vol. 9(1), pages 51-68, February.
    24. Jäger-Waldau, Arnulf & Szabó, Márta & Scarlat, Nicolae & Monforti-Ferrario, Fabio, 2011. "Renewable electricity in Europe," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(8), pages 3703-3716.
    25. Cansino, José M. & Pablo-Romero, María del P. & Román, Rocío & Yñiguez, Rocío, 2011. "Promoting renewable energy sources for heating and cooling in EU-27 countries," Energy Policy, Elsevier, vol. 39(6), pages 3803-3812, June.
    26. 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.
    27. Kitzing, Lena & Mitchell, Catherine & Morthorst, Poul Erik, 2012. "Renewable energy policies in Europe: Converging or diverging?," Energy Policy, Elsevier, vol. 51(C), pages 192-201.
    28. Yang, Chin W. & Hwang, Ming J. & Sohng, Soong N., 2002. "The Cournot competition in the spatial equilibrium model," Energy Economics, Elsevier, vol. 24(2), pages 139-154, March.
    29. Tükenmez, Mine & Demireli, Erhan, 2012. "Renewable energy policy in Turkey with the new legal regulations," Renewable Energy, Elsevier, vol. 39(1), pages 1-9.
    30. Butler, Lucy & Neuhoff, Karsten, 2008. "Comparison of feed-in tariff, quota and auction mechanisms to support wind power development," Renewable Energy, Elsevier, vol. 33(8), pages 1854-1867.
    31. Verbruggen, Aviel & Lauber, Volkmar, 2012. "Assessing the performance of renewable electricity support instruments," Energy Policy, Elsevier, vol. 45(C), pages 635-644.
    32. 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.
    33. Agnolucci, Paolo, 2006. "Use of economic instruments in the German renewable electricity policy," Energy Policy, Elsevier, vol. 34(18), pages 3538-3548, December.
    34. Al-Amir, Jawaher & Abu-Hijleh, Bassam, 2013. "Strategies and policies from promoting the use of renewable energy resource in the UAE," Renewable and Sustainable Energy Reviews, Elsevier, vol. 26(C), pages 660-667.
    35. Neuhoff, Karsten & Barquin, Julian & Boots, Maroeska G. & Ehrenmann, Andreas & Hobbs, Benjamin F. & Rijkers, Fieke A.M. & Vazquez, Miguel, 2005. "Network-constrained Cournot models of liberalized electricity markets: the devil is in the details," Energy Economics, Elsevier, vol. 27(3), pages 495-525, May.
    36. Batlle, Carlos, 2011. "A method for allocating renewable energy source subsidies among final energy consumers," Energy Policy, Elsevier, vol. 39(5), pages 2586-2595, May.
    37. Wiser, Ryan & Namovicz, Christopher & Gielecki, Mark & Smith, Robert, 2007. "The Experience with Renewable Portfolio Standards in the United States," The Electricity Journal, Elsevier, vol. 20(4), pages 8-20, May.
    38. Sauma, Enzo E. & Oren, Shmuel S., 2009. "Do generation firms in restructured electricity markets have incentives to support social-welfare-improving transmission investments?," Energy Economics, Elsevier, vol. 31(5), pages 676-689, September.
    39. Anthony Downward, 2010. "Carbon Charges in Electricity Markets with Strategic Behavior and Transmission," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 159-166.
    40. 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.
    41. Wang, Lizhi & Mazumdar, Mainak & Bailey, Matthew D. & Valenzuela, Jorge, 2007. "Oligopoly models for market price of electricity under demand uncertainty and unit reliability," European Journal of Operational Research, Elsevier, vol. 181(3), pages 1309-1321, September.
    42. Miguel Pérez de Arce and Enzo Sauma, 2016. "Comparison of Incentive Policies for Renewable Energy in an Oligopolistic Market with Price-Responsive Demand," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
    43. Xinmin Hu & Daniel Ralph, 2007. "Using EPECs to Model Bilevel Games in Restructured Electricity Markets with Locational Prices," Operations Research, INFORMS, vol. 55(5), pages 809-827, October.
    44. Mitchell, C. & Bauknecht, D. & Connor, P.M., 2006. "Effectiveness through risk reduction: a comparison of the renewable obligation in England and Wales and the feed-in system in Germany," Energy Policy, Elsevier, vol. 34(3), pages 297-305, February.
    45. Falconett, Irina & Nagasaka, Ken, 2010. "Comparative analysis of support mechanisms for renewable energy technologies using probability distributions," Renewable Energy, Elsevier, vol. 35(6), pages 1135-1144.
    46. Dong, C.G., 2012. "Feed-in tariff vs. renewable portfolio standard: An empirical test of their relative effectiveness in promoting wind capacity development," Energy Policy, Elsevier, vol. 42(C), pages 476-485.
    47. Fouquet, Dörte, 2013. "Policy instruments for renewable energy – From a European perspective," Renewable Energy, Elsevier, vol. 49(C), pages 15-18.
    48. Fouquet, Doerte & Johansson, Thomas B., 2008. "European renewable energy policy at crossroads--Focus on electricity support mechanisms," Energy Policy, Elsevier, vol. 36(11), pages 4079-4092, November.
    49. Albadi, M.H. & El-Saadany, E.F., 2009. "The role of taxation policy and incentives in wind-based distributed generation projects viability: Ontario case study," Renewable Energy, Elsevier, vol. 34(10), pages 2224-2233.
    50. Klemperer, Paul D & Meyer, Margaret A, 1989. "Supply Function Equilibria in Oligopoly under Uncertainty," Econometrica, Econometric Society, vol. 57(6), pages 1243-1277, November.
    51. Tanachai Limpaitoon & Yihsu Chen & Shmuel Oren, 2011. "The impact of carbon cap and trade regulation on congested electricity market equilibrium," Journal of Regulatory Economics, Springer, vol. 40(3), pages 237-260, December.
    52. Wustenhagen, Rolf & Bilharz, Michael, 2006. "Green energy market development in Germany: effective public policy and emerging customer demand," Energy Policy, Elsevier, vol. 34(13), pages 1681-1696, September.
    53. Enzo Sauma & Shmuel Oren, 2006. "Proactive planning and valuation of transmission investments in restructured electricity markets," Journal of Regulatory Economics, Springer, vol. 30(3), pages 261-290, November.
    54. Espey, Simone, 2001. "Renewables portfolio standard: a means for trade with electricity from renewable energy sources?," Energy Policy, Elsevier, vol. 29(7), pages 557-566, June.
    55. Cherrington, R. & Goodship, V. & Longfield, A. & Kirwan, K., 2013. "The feed-in tariff in the UK: A case study focus on domestic photovoltaic systems," Renewable Energy, Elsevier, vol. 50(C), pages 421-426.
    56. Martin, Nigel J. & Rice, John L., 2012. "Developing renewable energy supply in Queensland, Australia: A study of the barriers, targets, policies and actions," Renewable Energy, Elsevier, vol. 44(C), pages 119-127.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lee, Chul-Yong & Huh, Sung-Yoon, 2017. "Forecasting the diffusion of renewable electricity considering the impact of policy and oil prices: The case of South Korea," Applied Energy, Elsevier, vol. 197(C), pages 29-39.
    2. Charfeddine, Lanouar & Kahia, Montassar, 2019. "Impact of renewable energy consumption and financial development on CO2 emissions and economic growth in the MENA region: A panel vector autoregressive (PVAR) analysis," Renewable Energy, Elsevier, vol. 139(C), pages 198-213.
    3. Liobikienė, Genovaitė & Butkus, Mindaugas, 2017. "Environmental Kuznets Curve of greenhouse gas emissions including technological progress and substitution effects," Energy, Elsevier, vol. 135(C), pages 237-248.
    4. Haghi, Ehsan & Raahemifar, Kaamran & Fowler, Michael, 2018. "Investigating the effect of renewable energy incentives and hydrogen storage on advantages of stakeholders in a microgrid," Energy Policy, Elsevier, vol. 113(C), pages 206-222.
    5. Esily, Rehab R. & Yuanying, Chi & Ibrahiem, Dalia M. & Houssam, Nourhane & Makled, Randa A. & Chen, Yahui, 2023. "Environmental benefits of energy poverty alleviation, renewable resources, and urbanization in North Africa," Utilities Policy, Elsevier, vol. 82(C).
    6. Waewsak, Jompob & Ali, Shahid & Natee, Warut & Kongruang, Chuleerat & Chancham, Chana & Gagnon, Yves, 2020. "Assessment of hybrid, firm renewable energy-based power plants: Application in the southernmost region of Thailand," Renewable and Sustainable Energy Reviews, Elsevier, vol. 130(C).
    7. Shubin Wang & Weijie Li & Hasan Dincer & Serhat Yuksel, 2019. "Recognitive Approach to the Energy Policies and Investments in Renewable Energy Resources via the Fuzzy Hybrid Models," Energies, MDPI, vol. 12(23), pages 1-17, November.
    8. Ali, Syed Ahtsham & Alharthi, Majed & Hussain, Hafezali Iqbal & Rasul, Farhat & Hanif, Imran & Haider, Jahanzaib & Ullah, Saad & ur Rahman, Saeed & Abbas, Qaiser, 2021. "A clean technological innovation and eco-efficiency enhancement: A multi-index assessment of sustainable economic and environmental management," Technological Forecasting and Social Change, Elsevier, vol. 166(C).
    9. Lin-Ju Chen & Zhen-Hai Fang & Fei Xie & Hai-Kuo Dong & Yu-Heng Zhou, 2020. "Technology-side carbon abatement cost curves for China’s power generation sector," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 25(7), pages 1305-1323, October.
    10. Yang, Yong-cong & Nie, Pu-yan, 2022. "Subsidy for clean innovation considered technological spillover," Technological Forecasting and Social Change, Elsevier, vol. 184(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Miguel Pérez de Arce and Enzo Sauma, 2016. "Comparison of Incentive Policies for Renewable Energy in an Oligopolistic Market with Price-Responsive Demand," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
    2. Shen, Neng & Deng, Rumeng & Liao, Haolan & Shevchuk, Oleksandr, 2020. "Mapping renewable energy subsidy policy research published from 1997 to 2018: A scientometric review," Utilities Policy, Elsevier, vol. 64(C).
    3. Li, Jinke & Liu, Guy & Shao, Jing, 2020. "Understanding the ROC transfer payment in the renewable obligation with the recycling mechanism in the United Kingdom," Energy Economics, Elsevier, vol. 87(C).
    4. del Río, Pablo & Bleda, Mercedes, 2012. "Comparing the innovation effects of support schemes for renewable electricity technologies: A function of innovation approach," Energy Policy, Elsevier, vol. 50(C), pages 272-282.
    5. Stokes, Leah C., 2013. "The politics of renewable energy policies: The case of feed-in tariffs in Ontario, Canada," Energy Policy, Elsevier, vol. 56(C), pages 490-500.
    6. Polzin, Friedemann & Egli, Florian & Steffen, Bjarne & Schmidt, Tobias S., 2019. "How do policies mobilize private finance for renewable energy?—A systematic review with an investor perspective," Applied Energy, Elsevier, vol. 236(C), pages 1249-1268.
    7. Sun, Peng & Nie, Pu-yan, 2015. "A comparative study of feed-in tariff and renewable portfolio standard policy in renewable energy industry," Renewable Energy, Elsevier, vol. 74(C), pages 255-262.
    8. Li, Shin-Je & Chang, Ting-Huan & Chang, Ssu-Li, 2017. "The policy effectiveness of economic instruments for the photovoltaic and wind power development in the European Union," Renewable Energy, Elsevier, vol. 101(C), pages 660-666.
    9. Sakah, Marriette & Diawuo, Felix Amankwah & Katzenbach, Rolf & Gyamfi, Samuel, 2017. "Towards a sustainable electrification in Ghana: A review of renewable energy deployment policies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 79(C), pages 544-557.
    10. Martin, Nigel J. & Rice, John L., 2017. "Examining the use of concept analysis and mapping software for renewable energy feed-in tariff design," Renewable Energy, Elsevier, vol. 113(C), pages 211-220.
    11. Nicolini, Marcella & Tavoni, Massimo, 2017. "Are renewable energy subsidies effective? Evidence from Europe," Renewable and Sustainable Energy Reviews, Elsevier, vol. 74(C), pages 412-423.
    12. Escoffier, Margaux & Hache, Emmanuel & Mignon, Valérie & Paris, Anthony, 2021. "Determinants of solar photovoltaic deployment in the electricity mix: Do oil prices really matter?," Energy Economics, Elsevier, vol. 97(C).
    13. Schallenberg-Rodriguez, Julieta, 2017. "Renewable electricity support systems: Are feed-in systems taking the lead?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 76(C), pages 1422-1439.
    14. 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, vol. 5(2), pages 1-32, February.
    15. Romano, Antonio A. & Scandurra, Giuseppe & Carfora, Alfonso & Fodor, Mate, 2017. "Renewable investments: The impact of green policies in developing and developed countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 68(P1), pages 738-747.
    16. Lüthi, Sonja & Wüstenhagen, Rolf, 2012. "The price of policy risk — Empirical insights from choice experiments with European photovoltaic project developers," Energy Economics, Elsevier, vol. 34(4), pages 1001-1011.
    17. Connor, Peter & Bürger, Veit & Beurskens, Luuk & Ericsson, Karin & Egger, Christiane, 2013. "Devising renewable heat policy: Overview of support options," Energy Policy, Elsevier, vol. 59(C), pages 3-16.
    18. García-Álvarez, María Teresa & Cabeza-García, Laura & Soares, Isabel, 2017. "Analysis of the promotion of onshore wind energy in the EU: Feed-in tariff or renewable portfolio standard?," Renewable Energy, Elsevier, vol. 111(C), pages 256-264.
    19. Guillaume Bourgeois & Sandrine Mathy & Philippe Menanteau, 2017. "The effect of climate policies on renewable energies : a review of econometric studies [L’effet des politiques climatiques sur les énergies renouvelables : une revue des études économétriques]," Post-Print hal-01585906, HAL.
    20. Wang, Tan & Gong, Yu & Jiang, Chuanwen, 2014. "A review on promoting share of renewable energy by green-trading mechanisms in power system," Renewable and Sustainable Energy Reviews, Elsevier, vol. 40(C), pages 923-929.

    More about this item

    Keywords

    Renewable energy; Carbon tax; Feed-in tariff; Premium payment; Quota; Oligopoly; Variability;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:eneeco:v:54:y:2016:i:c:p:272-280. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eneco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.