Green, Brown, and Now White Certificates: Are Three One Too Many? A Micromodel of Market Interaction

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract Our paper deals with modeling the effects of introducing a market-based tool for improving end-users' efficiency in an energy market which is already regulated through a cap-and-trade system for green house gas emissions and a quota system meant to improve competitiveness of energy produced using renewable resources. Our results show that the regulation of energy demand achieves its underlying objects of energy savings and energy efficiency solely at the expense of other goals such as the environmental efficiency of energy production. In our model, the implementation of a market for White Certificates (WCTS) causes energy producers' investment in abatement to decrease along with the price for Brown Certificates and the amount of renewable energy demanded. Once we turn to the currently more empirically relevant case of integrating end-users only partially into WCTS, the unregulated group compensates in parts for the decrease in demand of the regulated group, due to an indirect price effect. As both supply and demand side of the market are regulated, this special set of regulations applied can, therefore, be compared to the grip of pincers embracing the entire market, leaving some of it virtually scarred. Consequently, we intended to search for alternative policy measures, which are able to achieve an increase in end-users' energy efficiency without the negative side-effects witnessed in case of a WCTS. In our model a subsidized reduction in the price for households' investment in energy efficiency renders just slightly more favorable results than an implementation of WCTS. However, the most effective way to accomplish all goals of environmental policy alike is to reduce the cap on emissions. Terms of use: Documents in

The Interaction of Emissions Trading and Renewable Energy Promotion

“…This is particularly the case for emission reduction policies and renewable support schemes but also effects energy efficiency targets (see Meran andWittmann, 2008, andSorrel andSijm, 2005). In this section we provide a review on different mechanism to obtain greenhouse gas reduction and present renewable support schemes.…”

Simultaneous Use of Black, Green, and White Certificates Systems: A Rather Messy Business

“…This result is also supported by Fischer and Preonas (2010) in their analysis. Along the same lines, Meran and Wittmann (2012) show that demand side management (e.g. using a white certificate system) achieves its underlying goal of an increase in end-users' energy efficiency solely at the expense of a reduced environmental efficiency of energy production.…”

“…Mortensen (2001, 2002), Unger and Ahlgren (2005), Böhringer and Rosendahl (2010)). Recently, some literature has emerged dealing with all certificates systems taken together (Meran and Wittmann (2012)).…”

“…Compared with the existing literature, e.g. Böhringer andRosendahl (2010), Fischer andPreonas (2010), Meran and Wittmann (2012), we set out to further untangle the various effects of partial changes of the strength of the various targets. For instance, we investigate whether a harsher target on green electricity generation leads to more or less energy saving being generated, or whether a harsher target of energy saving leads to more or less green electricity being generated.…”

Addressing the Climate Problem: Choice between Allowances, Feed-In Tariffs and Taxes

“…Furthermore, some analyze the coexistence between an electricity market, a black certificate market and feed-in tariffs. Recently, some literature has emerged addressing all certificate systems taken together (Meran and Wittmann, 2012). Feed-in tariffs and feed-in premiums are also well analyzed, e.g.…”