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A Reexamination of Renewable Electricity Policy in Sweden

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  • Fridolfsson, Sven-Olof

    (Research Institute of Industrial Economics (IFN))

  • Tangerås, Thomas

    (Research Institute of Industrial Economics (IFN))

Abstract

Green certificates are the main instrument for promoting renewable electricity (RES-E) in Sweden. But certificates cover only a limited share of total RES-E production. Under partial coverage, crowding out may arise whereby costly new RES-E replaces inexpensive old RES-E. Granting certificates to all of RES-E production improves efficiency, but leaves windfall rent to otherwise profitable facilities. We also analyze transaction costs in the permit process for new RES-E in Sweden. Municipalities veto socially desirable projects because of asymmetrically distributed investment costs and benefits. We propose market-based permit fees rather than limited veto rights as a solution to this NIMBY problem.

Suggested Citation

  • Fridolfsson, Sven-Olof & Tangerås, Thomas, 2012. "A Reexamination of Renewable Electricity Policy in Sweden," Working Paper Series 921, Research Institute of Industrial Economics.
    • Handle: RePEc:hhs:iuiwop:0921
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    References listed on IDEAS

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    7. Paul L. Joskow, 2011. "Comparing the Costs of Intermittent and Dispatchable Electricity Generating Technologies," American Economic Review, American Economic Association, vol. 101(3), pages 238-241, May.
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    Cited by:

    1. Dmytro Osiichuk, 2023. "The Obstacles to the Growth of the Renewable Energy Industry in the European Union," Sustainability, MDPI, vol. 15(19), pages 1-18, October.
    2. Matti Liski & Iivo Vehviläinen, 2016. "Gone with the Wind? An Empirical Analysis of the Renewable Energy Rent Transfer," CESifo Working Paper Series 6250, CESifo.
    3. Darmani, Anna & Rickne, Annika & Hidalgo, Antonio & Arvidsson, Niklas, 2016. "When outcomes are the reflection of the analysis criteria: A review of the tradable green certificate assessments," Renewable and Sustainable Energy Reviews, Elsevier, vol. 62(C), pages 372-381.
    4. Zeinab Rezvani & Johan Jansson & Maria Bengtsson, 2018. "Consumer motivations for sustainable consumption: The interaction of gain, normative and hedonic motivations on electric vehicle adoption," Business Strategy and the Environment, Wiley Blackwell, vol. 27(8), pages 1272-1283, December.
    5. Schallenberg-Rodriguez, Julieta, 2017. "Renewable electricity support systems: Are feed-in systems taking the lead?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 76(C), pages 1422-1439.
    6. Davide Antonioli & Simone Borghesi & Alessio D'Amato & Marianna Gilli & Massimiliano Mazzanti & Francesco Nicolli, 2014. "Analysing the Interactions of Energy and climate policies in a broad Policy ‘optimality’ framework. The Italian case study," SEEDS Working Papers 2514, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Aug 2014.
    7. Mohammad Nure Alam, 2021. "Accessing the Effect of Renewables on the Wholesale Power Market," International Journal of Energy Economics and Policy, Econjournals, vol. 11(2), pages 341-360.

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    More about this item

    Keywords

    Crowding out; Green certificates; NIMBY; Transaction costs; Windfall rent;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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