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Environmental Externalities, Market Distortions and the Economics of Renewable Energy Technologies1

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  • Anthony D. Owen

Abstract

This paper reviews life cycle analyses of alternative energy technologies in terms of both their private and societal costs (that is, inclusive of externalities and net of taxes and subsidies). The economic viability of renewable energy technologies is shown to be heavily dependent upon the removal of market distortions. In other words, the removal of subsidies to fossil fuel-based technologies and the appropriate pricing of these fuels to reflect the environmental damage (local, regional, and global) created by their combustion are essential policy strategies for stimulating the development of renewable energy technologies in the stationary power sector. Policy options designed to “internalize “these externalities are briefly addressed.

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  • Anthony D. Owen, 2004. "Environmental Externalities, Market Distortions and the Economics of Renewable Energy Technologies1," The Energy Journal, , vol. 25(3), pages 127-156, July.
    • Handle: RePEc:sae:enejou:v:25:y:2004:i:3:p:127-156
    DOI: 10.5547/ISSN0195-6574-EJ-Vol25-No3-7
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    References listed on IDEAS

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    1. Richard S.J. Tol, 2003. "The Marginal Costs Of Carbon Dioxide Emissions: An Assessment Of The Uncertainties," Working Papers FNU-19, Research unit Sustainability and Global Change, Hamburg University, revised Apr 2003.
    2. Krewitt, Wolfram, 2002. "External costs of energy--do the answers match the questions?: Looking back at 10 years of ExternE," Energy Policy, Elsevier, vol. 30(10), pages 839-848, August.
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    Cited by:

    1. Chad Fiechter & Binayak Kunwar & Guy Tchuente, 2024. "Monetary Incentives, Landowner Preferences: Estimating Cross-Elasticities in Farmland Conversion to Renewable Energy," Papers 2411.10600, arXiv.org.

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