Quantities vs. Capacities: Minimizing the Social Cost of Renewable Energy Promotion
This article shows how di erent promotion schemes for renewables a ect economic welfare. Given that the abatement of greenhouse gases is optimally internalized by taxes or emissions trading, our starting point is that the external benefits from renewable energy promotion are not related to actual electricity generation, but to producing and installing capacity. We argue that generation-based subsidies such as feed-in tari s and bonus payments can only be a second-best solution. Our model framework allows us to explain how these second-best instruments cause welfare losses in an environment of volatile demand. We postulate that capacity payments for renewables should be implemented in order to avoid unnecessary social costs.
|Date of creation:|
|Contact details of provider:|| Postal: Am Stadtgraben 9, 48143 Münster|
Phone: (02 51) 83-2 29 71
Fax: (02 51) 83-2 29 70
Web page: http://www.wiwi.uni-muenster.de/insiwo
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Martin L. Weitzman, 1974.
"Prices vs. Quantities,"
Review of Economic Studies,
Oxford University Press, vol. 41(4), pages 477-491.
- M. L. Weitzman, 1973. "Prices vs. Quantities," Working papers 106, Massachusetts Institute of Technology (MIT), Department of Economics.
- Knittel, Christopher R. & Roberts, Michael R., 2005. "An empirical examination of restructured electricity prices," Energy Economics, Elsevier, vol. 27(5), pages 791-817, September.
- Lehmann, Paul, 2008. "Using a Policy Mix for Pollution Control – A Review of Economic Literature," MPRA Paper 21354, University Library of Munich, Germany.
- Lehmann, Paul, 2008. "Using a policy mix for pollution control: A review of economic literature," UFZ Discussion Papers 4/2008, Helmholtz Centre for Environmental Research (UFZ), Division of Social Sciences (ÖKUS).
- Reiche, Danyel & Bechberger, Mischa, 2004. "Policy differences in the promotion of renewable energies in the EU member states," Energy Policy, Elsevier, vol. 32(7), pages 843-849, May.
- Nicolosi, Marco, 2010. "Wind power integration and power system flexibility-An empirical analysis of extreme events in Germany under the new negative price regime," Energy Policy, Elsevier, vol. 38(11), pages 7257-7268, November.
- Fischer, Carolyn & Newell, Richard G., 2008. "Environmental and technology policies for climate mitigation," Journal of Environmental Economics and Management, Elsevier, vol. 55(2), pages 142-162, March.
- Fischer, Carolyn & Newell, Richard, 2004. "Environmental and Technology Policies for Climate Mitigation," Discussion Papers dp-04-05, Resources For the Future.
- Reyer Gerlagh & Snorre Kverndokk & Knut Rosendahl, 2009. "Optimal Timing of Climate Change Policy: Interaction Between Carbon Taxes and Innovation Externalities," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 43(3), pages 369-390, July.
- Gerlagh, R. & Kverndokk, S. & Rosendahl, K.E., 2009. "Optimal timing of climate change policy : Interaction between carbon taxes and innovation externalities," Other publications TiSEM 4312dde8-f323-4ee2-9764-a, Tilburg University, School of Economics and Management.
- Guyomard, Herve & Bureau, Jean-Christophe & Gohin, Alexandre & Le Mouel, Chantal, 2000. "Impact of the 1996 US FAIR Act on the Common Agricultural Policy in the World Trade Organisation context: the decoupling issue," Food Policy, Elsevier, vol. 25(1), pages 17-34, February.
- Fanone, Enzo & Gamba, Andrea & Prokopczuk, Marcel, 2013. "The case of negative day-ahead electricity prices," Energy Economics, Elsevier, vol. 35(C), pages 22-34.
- : Enzo Fanone & Andrea Gamba & Marcel Prokopczuk, 2011. "The Case of Negative Day-Ahead Electricity Prices," Working Papers wpn11-01, Warwick Business School, Finance Group.
- Brandstätt, Christine & Brunekreeft, Gert & Jahnke, Katy, 2011. "How to deal with negative power price spikes?--Flexible voluntary curtailment agreements for large-scale integration of wind," Energy Policy, Elsevier, vol. 39(6), pages 3732-3740, June.
- Chantal Le Mouel, 2004. "Impacts of alternative agricultural income support schemes on multiple policy goals," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 31(2), pages 125-148, June. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:muc:wpaper:201284. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Norbert Hiller)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.