The political economy of international green certificate markets

Söderholm, Patrik

doi:10.1016/j.enpol.2008.02.023

Cited by 51 publications

(19 citation statements)

References 20 publications

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“…28 See also Söderholm (2008) for a discussion about the legitimacy challenges involved designing international tradable certificate markets. 29 Theoretically, it is straightforward to show that social cost-effectiveness will not imply minimum impacts on the electricity consumer collective.…”

Section: Equity: the Swedish Tgc System As A Rent-generating 'Machine'mentioning

confidence: 99%

Are tradable green certificates a cost-efficient policy driving technical change or a rent-generating machine? Lessons from Sweden 2003–2008

2010

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In the European policy debate, tradable green certificates (TGC) have been suggested to be a superior regulatory framework for promoting the diffusion of renewable electricity technologies. The purpose of this paper is to assess the performance of the Swedish TGC system, contributing to the European debate on the suitability of different types of frameworks. The expectations of the TGC system were that it would: a) be effective in terms of increasing the supply of "green" electricity; b) do this in a cost effective manner (from both a social and a consumer perspective); c) generate an equitable distribution of costs and benefits and d) drive technical change. So far, it has performed adequately in terms of effectiveness and social cost effectiveness. However, consumer costs have been substantially higher than expected, very large rents are generated and, at best, it contributes marginally to technical change. Thus, a TGC framework should be selected if the overriding concern is to minimize short term social costs of reaching a certain goal with a high degree of predictability. However, it cannot be expected to also drive technical change, keep consumer costs down and be equitable. Such trade-offs need to be revealed and not obscured by analysts.

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Section: Equity: the Swedish Tgc System As A Rent-generating 'Machine'mentioning

confidence: 99%

Are tradable green certificates a cost-efficient policy driving technical change or a rent-generating machine? Lessons from Sweden 2003–2008

2010

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“…Figure 3 Certificate market integration g E 14 to common belief, e.g. Söderholm (2008) and Schmalensee (2012), efficiency of an integrated certificate market does not imply equalization of renewable marginal production costs across the market. Hence, one could not draw the conclusion that integrated certificate markets were inefficient based simply upon an observation that marginal costs of renewable electricity production differ across the market.…”

Section: Proposition 5 If the Electricity Exporting (Importing) Countmentioning

confidence: 99%

“…Jensen and Skytte, 2002;Fischer and Newell, 2008;Böhringer and Rosendahl, 2010;Fischer, 2010;Fischer and Preonas, 2010), even those studying multinational markets (e.g. Amundsen and Mortensen, 2001;Morthorst, 2003;del Río, 2005;Unger and Ahlgren, 2005;Söderholm, 2008;Amundsen and Bergman, 2012). Traber and Kemfert (2009) The remainder of this paper is organized as follows: Section 2 analyzes the effects on prices, production, transmission investment and welfare of introducing certificates in a multinational electricity market.…”

Section: Introductionmentioning

confidence: 99%

Renewable Electricity Policy and Market Integration

Tangerås

2013

SSRN Journal

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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 I analyze renewable electricity policy in a multinational electricity market with transmission investment. If national policy makers choose support schemes to maximize domestic welfare, then a trade policy motive arises operating independently of any direct benefit of renewable electricity. The model predicts electricity importing (exporting) countries to choose policies which reduce (increase) electricity prices. A narrow pursuit of domestic objectives distorts transmission investment, thereby market integration, below the efficient level. Distortions cannot be corrected by imposing national renewable targets alone. Instead, subsidies to transmission investment and a harmonization of and reduction in the number of policy instruments can improve welfare. Terms of use: Documents in EconStor may

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“…Morthorst, 2001;Jensen and Skytte, 2003;Söderholm, 2008), and between TGC markets and liberalized power markets (e.g. Mortensen, 2001, 2002;Jensen and Skytte, 2002;Morthorst, 2003;Amundsen and Bergman, 2004), respectively.…”

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confidence: 99%

Promoting Renewable Electricity Generation in Imperfect Markets: Price vs. Quantity Policies

Madlener

Neustadt²,

Zweifel

2008

SSRN Journal

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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. Terms of use: Documents in AbstractThe search for economically efficient policy instruments designed to promote the diffusion of renewable energy technologies in liberalized markets has led to the introduction of quota-based tradable 'green' certificate (TGC) schemes for renewable electricity. However, there is a debate about the pros and cons of TGC, a quantity control policy, compared to guaranteed feed-in tariffs, a price control policy. In this paper we contrast these two alternatives in terms of social welfare, taking into account that electricity markets are not perfectly competitive, and show that the price control policy dominates the quantity control policy in terms of social welfare.

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The political economy of international green certificate markets

Cited by 51 publications

References 20 publications

Are tradable green certificates a cost-efficient policy driving technical change or a rent-generating machine? Lessons from Sweden 2003–2008

Are tradable green certificates a cost-efficient policy driving technical change or a rent-generating machine? Lessons from Sweden 2003–2008

Renewable Electricity Policy and Market Integration

Promoting Renewable Electricity Generation in Imperfect Markets: Price vs. Quantity Policies

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