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Learning Curve and Wind Power

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  • Silvia Micheli

Abstract

This study explores the reasons why countries have chosen subsidies to green electricity instead of implementing the more common Pigouvian tax on polluting emissions. I focus on the learning by doing effects from the production of wind power on the cost of future production as a justification for the observed policies. In doing so, I present two models that differ in the way I introduce learning. Under reasonable parameter values, the price paid to a firm for the energy produced from wind power is heterogeneous, and varies among the firms that produce energy from wind power according to the index of productivity of the firm itself. The suggested strategies of this research differ from the main price-driven schemes adopted by EU members; by comparing such results with European Union policy, the paper show that EU policy is not optimal.

Suggested Citation

  • Silvia Micheli, 2010. "Learning Curve and Wind Power," Quaderni del Dipartimento di Economia, Finanza e Statistica 81/2010, Università di Perugia, Dipartimento Economia.
  • Handle: RePEc:pia:wpaper:81/2010
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    Cited by:

    1. Davide Castellani & Fabio Pieri, 2011. "Foreign Investments and Productivity Evidence from European Regions," Quaderni del Dipartimento di Economia, Finanza e Statistica 83/2011, Università di Perugia, Dipartimento Economia.
    2. Stefano Herzel & Marco Nicolosi & Cătălin Stărică, 2012. "The cost of sustainability in optimal portfolio decisions," The European Journal of Finance, Taylor & Francis Journals, vol. 18(3-4), pages 333-349, May.
    3. Francesco Venturini, 2011. "Product variety, product quality, and evidence of Schumpeterian endogenous growth: a note," Quaderni del Dipartimento di Economia, Finanza e Statistica 93/2011, Università di Perugia, Dipartimento Economia.

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    More about this item

    Keywords

    learning by doing; environmental policy; Pigouvian taxes; subsidies.;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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