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The costs and benefits of white certificates schemes

Author

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  • Louis-Gaëtan Giraudet

    (CIRED - centre international de recherche sur l'environnement et le développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)

  • Luc Bodineau

    (ADEME - Agence de l'Environnement et de la Maîtrise de l'Energie)

  • Dominique Finon

    (CIRED - centre international de recherche sur l'environnement et le développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)

Abstract

White certificate schemes mandate energy companies to promote energy efficiency with flexibility mechanisms, including the trading of energy savings. A unified framework is used to estimate the costs and benefits of the schemes implemented in Great Britain in 2002, in Italy in 2005 and in France in 2006. "Negawatt-hour cost" estimates reach €0.009 per kWh saved in Great Britain and €0.037 per kWh saved in France, which compares favourably to energy prices in those countries. Moreover, the benefits of reduced energy bills and CO2 emissions saved exceed the costs, thus white certificate schemes pay for themselves. Overall, the policy instrument is cost-effective and economically efficient. A closer look at the differences among countries provides general insights about the conceptualization of the instrument : (i) compared to utility demand-side management, to which they are related, white certificate schemes provide more transparency about energy savings, but less transparency around costs ; (ii) the substantial efficiency discrepancy between the British scheme and its French counterpart can be explained by differences in technological potentials, coexisting policies and supply-side systems in these countries ; (iii) the nature and amount of costs influence compliance strategies. Notably, if energy suppliers are allowed to set their retail price freely, they tend to grant subsidies to end-use consumers for energy efficient investments.

Suggested Citation

  • Louis-Gaëtan Giraudet & Luc Bodineau & Dominique Finon, 2011. "The costs and benefits of white certificates schemes," CIRED Working Papers hal-00866420, HAL.
  • Handle: RePEc:hal:ciredw:hal-00866420
    Note: View the original document on HAL open archive server: https://hal.science/hal-00866420
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    Citations

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    Cited by:

    1. Laura Abrardi & Carlo Cambini, 2014. "Tariff Regulation with Energy Efficiency Goals," IEFE Working Papers 65, IEFE, Center for Research on Energy and Environmental Economics and Policy, Universita' Bocconi, Milano, Italy.
    2. Rosenow, Jan & Bayer, Edith, 2017. "Costs and benefits of Energy Efficiency Obligations: A review of European programmes," Energy Policy, Elsevier, vol. 107(C), pages 53-62.
    3. Palmer, Karen L. & Grausz, Samuel & Beasley, Blair & Brennan, Timothy J., 2013. "Putting a floor on energy savings: Comparing state energy efficiency resource standards," Utilities Policy, Elsevier, vol. 25(C), pages 43-57.
    4. Bhandari, Divita & Shrimali, Gireesh, 2018. "The perform, achieve and trade scheme in India: An effectiveness analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 81(P1), pages 1286-1295.
    5. de la Rue du Can, Stephane & Leventis, Greg & Phadke, Amol & Gopal, Anand, 2014. "Design of incentive programs for accelerating penetration of energy-efficient appliances," Energy Policy, Elsevier, vol. 72(C), pages 56-66.
    6. Moser, Simon, 2013. "Poor energy poor: Energy saving obligations, distributional effects, and the malfunction of the priority group," Energy Policy, Elsevier, vol. 61(C), pages 1003-1010.
    7. Cyril Bourgeois & Louis-Gaëtan Giraudet & Philippe Quirion, 2019. "Social-environmental-economic trade-offs associated with carbon-tax revenue recycling [Arbitrages économiques, sociaux et environnementaux pour le recyclage des revenus de la taxe carbone]," Working Papers hal-02073964, HAL.
    8. Jonathan Sinton & Joeri de Wit, 2014. "Exploiting Market-Based Mechanisms to Meet Utilities' Energy Efficiency Obligations," World Bank Publications - Reports 18678, The World Bank Group.
    9. Lecuyer, Oskar & Quirion, Philippe, 2013. "Can uncertainty justify overlapping policy instruments to mitigate emissions?," Ecological Economics, Elsevier, vol. 93(C), pages 177-191.
    10. Brennan, Timothy J. & Palmer, Karen L., 2013. "Energy efficiency resource standards: Economics and policy," Utilities Policy, Elsevier, vol. 25(C), pages 58-68.
    11. Philippe Quirion, 2021. "Tradable instruments to fight climate change: A disappointing outcome," Post-Print hal-03495904, HAL.
    12. Louis-Gaetan Giraudet and Dominique Finon, 2015. "European experiences with white certifirecate obligations: A critical review of existing evaluations," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 1).
    13. Louis-Gaëtan Giraudet & D. Finon, 2014. "European experiences with white certificate obligations: A critical review of existing evaluations," Working Papers hal-01016110, HAL.
    14. Bye, Brita & Fæhn, Taran & Rosnes, Orvika, 2018. "Residential energy efficiency policies: Costs, emissions and rebound effects," Energy, Elsevier, vol. 143(C), pages 191-201.
    15. Clemens Rohde & Jan Rosenow & Nick Eyre & Louis-Gaëtan Giraudet, 2015. "Energy saving obligations—cutting the Gordian Knot of leverage?," Post-Print hal-01016112, HAL.
    16. repec:hal:ciredw:hal-01016112 is not listed on IDEAS

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