IDEAS home Printed from
   My bibliography  Save this article

White certificate schemes: Economic analysis and interactions with the EU ETS


  • Sorrell, Steve
  • Harrison, David
  • Radov, Daniel
  • Klevnas, Per
  • Foss, Andrew


This paper examines the economic, environmental and distributional impacts of an idealised tradable white certificate (TWC) scheme and shows how the impacts are modified when the scheme operates in parallel with the EU emissions trading scheme (EU ETS). It uses simple graphical techniques to assess whether a TWC scheme will increase, decrease or have an ambiguous effect on electricity demand, wholesale and retail electricity prices, carbon emissions and investment in energy efficiency, paying particular attention to the interpretation of 'additionality'. Following a comparable analysis of the impact of the EU ETS, the paper examines the implications of introducing a white certificate scheme in a country that is already participating in the EU ETS. It compares the effect of this combination of instruments to that of the EU ETS operating in isolation. It concludes that there is no necessary link between the price of white certificates and marginal cost of energy efficiency investment, the price of electricity or the ability of the suppliers to eliminate free riders from their subsidy schemes. Also, a TWC scheme will make no contribution to reducing global carbon emissions unless and until it leads to a tightening of the EU ETS cap.

Suggested Citation

  • Sorrell, Steve & Harrison, David & Radov, Daniel & Klevnas, Per & Foss, Andrew, 2009. "White certificate schemes: Economic analysis and interactions with the EU ETS," Energy Policy, Elsevier, vol. 37(1), pages 29-42, January.
  • Handle: RePEc:eee:enepol:v:37:y:2009:i:1:p:29-42

    Download full text from publisher

    File URL:
    Download Restriction: Full text for ScienceDirect subscribers only

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

    References listed on IDEAS

    1. Karsten Neuhoff & Kim Keats Martinez & Misato Sato, 2006. "Allocation, incentives and distortions: the impact of EU ETS emissions allowance allocations to the electricity sector," Climate Policy, Taylor & Francis Journals, vol. 6(1), pages 73-91, January.
    2. Palmer, Karen & Newell, Richard & Gillingham, Kenneth, 2004. "Retrospective Examination of Demand-side Energy-efficiency Policies," Discussion Papers dp-04-19, Resources For the Future.
    3. Nadel, Steven & Geller, Howard, 1996. "Utility DSM : What have we learned? Where are we going?," Energy Policy, Elsevier, vol. 24(4), pages 289-302, April.
    4. Jos Sijm & Karsten Neuhoff & Yihsu Chen, 2006. "CO 2 cost pass-through and windfall profits in the power sector," Climate Policy, Taylor & Francis Journals, vol. 6(1), pages 49-72, January.
    5. Sorrell, Steve & Dimitropoulos, John, 2008. "The rebound effect: Microeconomic definitions, limitations and extensions," Ecological Economics, Elsevier, vol. 65(3), pages 636-649, April.
    6. Vine, Edward & Hamrin, Jan, 2008. "Energy savings certificates: A market-based tool for reducing greenhouse gas emissions," Energy Policy, Elsevier, vol. 36(1), pages 467-476, January.
    7. Steven Braithwait & Douglas Caves, 1994. "Three Biases in Cost-Efficiency Tests of Utility Energy Efficiency Programs," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 95-120.
    8. Jensen, S. G. & Skytte, K., 2002. "Interactions between the power and green certificate markets," Energy Policy, Elsevier, vol. 30(5), pages 425-435, April.
    9. Langniss, Ole & Praetorius, Barbara, 2006. "How much market do market-based instruments create? An analysis for the case of "white" certificates," Energy Policy, Elsevier, vol. 34(2), pages 200-211, January.
    10. Oikonomou, Vlasis & Rietbergen, Martijn & Patel, Martin, 2007. "An ex-ante evaluation of a White Certificates scheme in The Netherlands: A case study for the household sector," Energy Policy, Elsevier, vol. 35(2), pages 1147-1163, February.
    11. Steven Sorrell, 2003. "Carbon Trading in the Policy Mix," Oxford Review of Economic Policy, Oxford University Press, vol. 19(3), pages 420-437.
    12. Morthorst, P. E., 2001. "Interactions of a tradable green certificate market with a tradable permits market," Energy Policy, Elsevier, vol. 29(5), pages 345-353, April.
    13. J. Daniel Khazzoom, 1980. "Economic Implications of Mandated Efficiency in Standards for Household Appliances," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 21-40.
    14. Torstein Bye, 2003. "On the Price and Volume Effects from Green Certificates in the Energy Market," Discussion Papers 351, Statistics Norway, Research Department.
    15. Haas, Reinhard & Schipper, Lee, 1998. "Residential energy demand in OECD-countries and the role of irreversible efficiency improvements," Energy Economics, Elsevier, vol. 20(4), pages 421-442, September.
    16. Goldman, Charles A. & Hopper, Nicole C. & Osborn, Julie G., 2005. "Review of US ESCO industry market trends: an empirical analysis of project data," Energy Policy, Elsevier, vol. 33(3), pages 387-405, February.
    17. Berkhout, Peter H. G. & Muskens, Jos C. & W. Velthuijsen, Jan, 2000. "Defining the rebound effect," Energy Policy, Elsevier, vol. 28(6-7), pages 425-432, June.
    Full references (including those not matched with items on IDEAS)


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

    Cited by:

    1. Oskar Lecuyer & Ruben Bibas, 2011. "Combining climate and energy policies: synergies or antagonisms?," Post-Print hal-00801917, HAL.
    2. Amundsen, Eirik Schrøder & Bye, Torstein, 2016. "Simultaneous use of black, green, and white certificates systems: A rather messy business," Working Papers in Economics 06/16, University of Bergen, Department of Economics.
    3. repec:eee:enepol:v:107:y:2017:i:c:p:53-62 is not listed on IDEAS
    4. Oskar Lecuyer & Ruben Bibas, 2011. "Combining Climate and Energy Policies: Synergies or Antagonism? Modeling Interactions With Energy Efficiency Instruments," Working Papers 2011.98, Fondazione Eni Enrico Mattei.
    5. Wittmann, Nadine, 2013. "A critical microeconomic analysis of modelling the interaction of WCTS and EU ETS," Energy Policy, Elsevier, vol. 60(C), pages 840-843.
    6. Chitnis, Mona & Sorrell, Steve & Druckman, Angela & Firth, Steven K. & Jackson, Tim, 2014. "Who rebounds most? Estimating direct and indirect rebound effects for different UK socioeconomic groups," Ecological Economics, Elsevier, vol. 106(C), pages 12-32.
    7. Louis-Gaetan Giraudet and Dominique Finon, 2015. "European experiences with white certifirecate obligations: A critical review of existing evaluations," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 1).
    8. Stede, Jan, 2017. "Bridging the industrial energy efficiency gap – Assessing the evidence from the Italian white certificate scheme," Energy Policy, Elsevier, vol. 104(C), pages 112-123.
    9. Eirik S. Amundsen & Torstein Bye, 2016. "Simultaneous use of black, green, and white certificates systems: A rather messy business," IFRO Working Paper 2016/03, University of Copenhagen, Department of Food and Resource Economics.
    10. Fleiter, Tobias & Schleich, Joachim & Ravivanpong, Ployplearn, 2012. "Adoption of energy-efficiency measures in SMEs—An empirical analysis based on energy audit data from Germany," Energy Policy, Elsevier, vol. 51(C), pages 863-875.
    11. Rosenow, Jan, 2012. "Energy savings obligations in the UK—A history of change," Energy Policy, Elsevier, vol. 49(C), pages 373-382.
    12. repec:gam:jsusta:v:9:y:2017:i:5:p:837-:d:98883 is not listed on IDEAS
    13. Petrella, Andrea & Sapio, Alessandro, 2012. "Assessing the impact of forward trading, retail liberalization, and white certificates on the Italian wholesale electricity prices," Energy Policy, Elsevier, vol. 40(C), pages 307-317.
    14. Chitnis, Mona & Sorrell, Steve & Druckman, Angela & Firth, Steven K. & Jackson, Tim, 2013. "Turning lights into flights: Estimating direct and indirect rebound effects for UK households," Energy Policy, Elsevier, vol. 55(C), pages 234-250.
    15. Thema, Johannes & Suerkemper, Felix & Grave, Katharina & Amelung, Adrian, 2013. "The impact of electricity demand reduction policies on the EU-ETS: Modelling electricity and carbon prices and the effect on industrial competitiveness," Energy Policy, Elsevier, vol. 60(C), pages 656-666.
    16. Davide Antonioli & Simone Borghesi & Alessio D'Amato & Marianna Gilli & Massimiliano Mazzanti & Francesco Nicolli, 2014. "Analysing the Interactions of Energy and climate policies in a broad Policy ‘optimality’ framework. The Italian case study," SEEDS Working Papers 2514, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Aug 2014.
    17. Hull, David & Ó Gallachóir, Brian P. & Walker, Neil, 2009. "Development of a modelling framework in response to new European energy-efficiency regulatory obligations: The Irish experience," Energy Policy, Elsevier, vol. 37(12), pages 5363-5375, December.
    18. Spyridaki, N.-A. & Flamos, A., 2014. "A paper trail of evaluation approaches to energy and climate policy interactions," Renewable and Sustainable Energy Reviews, Elsevier, vol. 40(C), pages 1090-1107.
    19. Clò, Stefano & Battles, Susan & Zoppoli, Pietro, 2013. "Policy options to improve the effectiveness of the EU emissions trading system: A multi-criteria analysis," Energy Policy, Elsevier, vol. 57(C), pages 477-490.


    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:enepol:v:37:y:2009:i:1:p:29-42. 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). General contact details of provider: .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.