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A decarbonization strategy for the electricity sector: New-source subsidies


  • Johnson, Kenneth C.


An expedient phase-out of carbon emissions in the electricity sector could be facilitated by imposing carbon fees and applying the revenue exclusively to subsidize new, low-carbon generation sources. Since there would initially be no "new sources," fees would be substantially zero at the outset of the program. Nevertheless, the program would immediately create high price incentives for low-carbon capacity expansion. Fees would increase as new, low-carbon sources gain market share, but price competition from a growing, subsidized clean-energy industry would help maintain moderate retail electricity prices. Subsidies would automatically phase out as emitting sources become obsolete.

Suggested Citation

  • Johnson, Kenneth C., 2010. "A decarbonization strategy for the electricity sector: New-source subsidies," Energy Policy, Elsevier, vol. 38(5), pages 2499-2507, May.
  • Handle: RePEc:eee:enepol:v:38:y:2010:i:5:p:2499-2507

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    References listed on IDEAS

    1. Sterner, Thomas & Hoglund Isaksson, Lena, 2006. "Refunded emission payments theory, distribution of costs, and Swedish experience of NOx abatement," Ecological Economics, Elsevier, vol. 57(1), pages 93-106, April.
    2. Johnson, Kenneth C., 2007. "Refunded emission taxes: A resolution to the cap-versus-tax dilemma for greenhouse gas regulation," Energy Policy, Elsevier, vol. 35(5), pages 3115-3118, May.
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    Cited by:

    1. Tahri, Meryem & Hakdaoui, Mustapha & Maanan, Mohamed, 2015. "The evaluation of solar farm locations applying Geographic Information System and Multi-Criteria Decision-Making methods: Case study in southern Morocco," Renewable and Sustainable Energy Reviews, Elsevier, vol. 51(C), pages 1354-1362.
    2. Timmons, David & Konstantinidis, Charalampos & Shapiro, Andrew M. & Wilson, Alex, 2016. "Decarbonizing residential building energy: A cost-effective approach," Energy Policy, Elsevier, vol. 92(C), pages 382-392.

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