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Tradable Green Certificates as a Policy Instrument? A Discussion on the Case of Poland


  • Christoph Heinzel

    () (Centre for Energy and Environmental Markets (CEEM) School of Economics, Australian School of Business, University of New South Wales, Sydney, Australia)

  • Thomas Winkler

    () (WSB Neue Energien GmbH)


Quota obligation schemes based on tradable green certificates have become a popular policy instrument to expand power generation from renewable energy sources (RES). Their application, however, can neither be justified as a first-best response to a market failure, nor, in a second-best sense, as an instrument mitigating distortionary effects of the emissions externality, if an emissions trading system exists that fully covers the energy industry. We study how ancillary reasons, in form of overcoming various barriers for RES use and establishing beneficial side-effects, such as industry development, energy security, and abatement of pollutants not covered under the ETS, apply to the scheme recently introduced in Poland. While setting substantial expansion incentives, an advantage for local industry or job-market development or energy security can hardly be seen. With rising power prices for end consumers and awareness that the extra rents from the schemes mostly accrue to foreign investors and renewable and polluting generators, we expect a negative impact on social acceptance for RES and RES deployment support policies.

Suggested Citation

  • Christoph Heinzel & Thomas Winkler, 2010. "Tradable Green Certificates as a Policy Instrument? A Discussion on the Case of Poland," Environmental Economics Research Hub Research Reports 1058, Environmental Economics Research Hub, Crawford School of Public Policy, The Australian National University.
  • Handle: RePEc:een:eenhrr:1058

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    1. Roger H. von Haefen & D. Matthew Massey & Wiktor L. Adamowicz, 2005. "Serial Nonparticipation in Repeated Discrete Choice Models," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(4), pages 1061-1076.
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    1. EERH Research Reports: June 2010
      by David Stern in Stochastic Trend on 2010-07-03 15:06:00

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    tradable green certificates; environmental policy; Poland;

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