Interaction of Carbon Reduction and Green Energy Promotion in a Small Fossil-Fuel Importing Economy
We study the incidence of carbon-reduction and green-energy promotion policies in an open fossil-fuel importing general equilibrium economy. The focus is on mixed price-based or quantity-based policies. Instruments directed toward promoting green energy are shown to reduce also carbon emissions and vice versa. Their direct effects are stronger than their side effects, the more so, the greater is the elasticity of substitution in consumption between en-ergy and the consumption good. We calculate the effects of variations in individual policy parameters, especially on energy prices and welfare costs, and determine the impact of exoge-nous fossil-fuel price shocks on the economy.
|Date of creation:||2009|
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- Torstein Bye & Annegrete Bruvoll, 2008. "Multiple instruments to change energy behaviour: The emperor's new clothes?," Discussion Papers 549, Statistics Norway, Research Department.
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- Fischer, Carolyn & Newell, Richard G., 2008.
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- Jensen, Stine Grenaa & Skytte, Klaus, 2003. "Simultaneous attainment of energy goals by means of green certificates and emission permits," Energy Policy, Elsevier, vol. 31(1), pages 63-71, January.
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