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On the welfare effects of subsidy game for renewable energy investment: Toward a dynamic equilibrium model

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  • Yang, Yong-cong
  • Nie, Pu-yan
  • Liu, Hui-ting
  • Shen, Ming-hao

Abstract

This paper focuses on the welfare effects of subsidy game for renewable energy investment between two neighboring regions. By employing a dynamic control model, the stationary equilibrium is solved under various scenarios. The major findings indicate that, the optimal subsidy strategies for both regions depend on a series of factors, including social capital, emission intensity of traditional energy and production efficiency of renewable energy and so on. Meanwhile, neither competitive strategy nor cooperative strategy is necessarily better than the other in the bidding game. Furthermore, the effects of Pigouvian tax on subsidy intensity are negative, while the changes of the equilibrium investment of renewable energy are uncertain.

Suggested Citation

  • Yang, Yong-cong & Nie, Pu-yan & Liu, Hui-ting & Shen, Ming-hao, 2018. "On the welfare effects of subsidy game for renewable energy investment: Toward a dynamic equilibrium model," Renewable Energy, Elsevier, vol. 121(C), pages 420-428.
  • Handle: RePEc:eee:renene:v:121:y:2018:i:c:p:420-428
    DOI: 10.1016/j.renene.2017.12.097
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    16. Pu‐Yan Nie & Xu Xiao & Chan Wang & Ting Cui, 2020. "Innovation subsidy under duopoly," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(3), pages 362-370, April.
    17. Xu, Xiaofeng & Wei, Zhifei & Ji, Qiang & Wang, Chenglong & Gao, Guowei, 2019. "Global renewable energy development: Influencing factors, trend predictions and countermeasures," Resources Policy, Elsevier, vol. 63(C), pages 1-1.
    18. Bogdan Klepacki & Barbara Kusto & Piotr Bórawski & Aneta Bełdycka-Bórawska & Konrad Michalski & Aleksandra Perkowska & Tomasz Rokicki, 2021. "Investments in Renewable Energy Sources in Basic Units of Local Government in Rural Areas," Energies, MDPI, vol. 14(11), pages 1-17, May.
    19. Chang, Kai & Wan, Qiong & Lou, Qichun & Chen, Yili & Wang, Weihong, 2020. "Green fiscal policy and firms’ investment efficiency: New insights into firm-level panel data from the renewable energy industry in China," Renewable Energy, Elsevier, vol. 151(C), pages 589-597.
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