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Green tradable certificates versus feed-in tariffs in the promotion of renewable energy shares

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  • Till Requate

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Abstract

The paper analyzes the relationship between CO 2 mitigation policy and promotion policies designed to deploy renewable energy sources for electricity production (RES-E). If an emission cap is the only policy target, an optimal mix consisting of high and low carbon use of fossil fuels, deployment of RES-E, and energy savings can best be achieved by either setting a uniform carbon tax or by implementing a cap-and-trade system covering all CO 2 sources. An additional RES-E share target causes higher costs in achieving the cap. Conversely, a more ambitious emission target automatically increases the RES-E share. In a second step, we investigate different policies for inducing an RES-E quota. Such a quota can be efficiently achieved either by a system of tradable green certificates, budget-balanced FIT system, or budget-balancing premium system. We also show that differentiated, technology-specific FITs are not efficient. Copyright Society for Environmental Economics and Policy Studies and Springer Japan 2015

Suggested Citation

  • Till Requate, 2015. "Green tradable certificates versus feed-in tariffs in the promotion of renewable energy shares," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 17(2), pages 211-239, April.
  • Handle: RePEc:spr:envpol:v:17:y:2015:i:2:p:211-239
    DOI: 10.1007/s10018-014-0096-8
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    References listed on IDEAS

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    Cited by:

    1. Peter Haan & Martin Simmler, 2016. "Wind Electricity Subsidies = Windfall Gains for Land Owners? Evidence from Feed-In Tariff in Germany," Discussion Papers of DIW Berlin 1568, DIW Berlin, German Institute for Economic Research.
    2. repec:spr:envpol:v:19:y:2017:i:4:d:10.1007_s10018-016-0171-4 is not listed on IDEAS
    3. repec:eee:pubeco:v:159:y:2018:i:c:p:16-32 is not listed on IDEAS
    4. Federico Boffa, Stefano Clò, and Alessio D'Amato, 2016. "Investment in Renewables under Uncertainty: Fitting a Feed-in Scheme into ETS," The Energy Journal, International Association for Energy Economics, vol. 0(Bollino-M).
    5. Simmler, Martin & Haan, Peter, 2015. "On the incidence of renewable energy subsidies into land prices - Evidence from Germany," Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112950, Verein für Socialpolitik / German Economic Association.
    6. repec:eee:enepol:v:117:y:2018:i:c:p:86-99 is not listed on IDEAS

    More about this item

    Keywords

    Feed-in tariffs; Tradable green certificates; Premium systems; Emission cap; Cap and trade; L38; L51; L94; Q28; Q42; Q55;

    JEL classification:

    • L38 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Policy
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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