Transaction Costs of Low-Carbon Technologies and Policies: The Diverging Literature

Abstract

The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.

Towards a More Realistic Cost–Benefit Analysis—Attempting to Integrate Transaction Costs and Energy Efficiency Services

“…Here, TACs include both activities and operations carried out by employees of the companies and the costs arising from external contracts (like contracting craft businesses). A set of relevant TAC subtypes including illustrative examples from the field of energy efficiency can be found in the following list [32,33]:…”

“…Search costs and information processing (including search costs for providers of energy services): identifying credible information on technologies (e.g., on performance or investment costs), funding schemes, and crafts businesses for installation • Decision-making costs: (i) deciding whether an investment will be adopted Opportunity costs or costs for lost alternative investments: capital or staff used for energy efficiency investment "lost" for alternative decisions such as production increases Even though the characteristics and relevance of transaction costs are regularly discussed in literature (e.g., [32][33][34]), there are hardly any references to quantify the costs. Furthermore, the methods for calculating TAC differ significantly from study to study or are not made transparent.…”

“…Furthermore, the methods for calculating TAC differ significantly from study to study or are not made transparent. The results of the limited number of studies that calculate TAC (especially [32,35,36]) are used in Section 3.1 to estimate the level of TAC for the case studies. It has to be noticed that the data from these sources are relatively old [37,38] or have a limited geographical focus [39].…”

“…This section summarizes the results derived from the literature on the quantification of transaction costs for energy efficiency investments in companies and derives the transaction costs for the energy efficiency measures displayed in Table 1. Even though the topic of transaction costs is often touched upon the literature [32,37], empirical investigations have hardly been done and only a few references are available that deal with the quantification of TAC. The authors of [45] compiled the findings for quantifying transaction costs for some specific technologies in the buildings sector.…”

A Global Survey and Review of the Determinants of Transaction Costs of Forestry Carbon Projects

“…Although there is a growing body of literature examining TCs, a universally agreed and fit-for-all definition for this type of cost is lacking (Chadwick, 2006;Falconer and Whitby, 1999;Garrick et al, 2013;Meshack et al, 2006;Mundaca et al, 2013;Wang, 2007). In practice, TCs are usually defined based on the activities that generate the costs (see for different definitions: Dahlman, 1979;Matthews, 1986;Woerdman, 2004).…”