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Effective Promotion of Renewable Energy in the Presence of an Emissions Trading System
This paper contributes to the literature of overlapping regulations as we introduce a model, which gives insights in an efective combination of the EU emissions trading system (ETS) and the promotion of renew- able energy within the electricity sector. Under consideration of EU long term objecti...
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| Published in: | MAGKS - Joint Discussion Paper Series in Economics (Band 09-2014b) |
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| Main Author: | |
| Format: | Article |
| Language: | English |
| Published: |
2014
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| Subjects: | |
| Online Access: | PDF Full Text |
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| Summary: | This paper contributes to the literature of overlapping regulations as
we introduce a model, which gives insights in an efective combination
of the EU emissions trading system (ETS) and the promotion of renew-
able energy within the electricity sector. Under consideration of EU
long term objectives in CO2 mitigation we evaluate the efcient share
of renewable energy. Hence, we give rise to the question, if the actual
amount of renewable energy production already exceeds this share mak-
ing a stop or at least a modification of its promotion necessary. Our
approach proves to be robust to a change of pattern of marginal abate-
ment costs (MAC), while resulting variances can be narrowed down and
quantified. For its application to empirical data, we develop a method
to evaluate the performance of the ETS and the promotion of renewable
energy. On that basis we suggest modifications of the ETS to uncouple
the certificate price from economical fluctuations and the development
of renewable energy leading to their better combination and stronger
mitigation incentives. For Germany it turns out, that the electricity
generation of renewables has not exceeded its optimal share yet, while
data is restricted due to low mitigation incentives set by the ETS. There-
fore both the suggested improvement of the ETS and the monitoring of
the development of renewable energy, referred to our model, is strongly
recommended. |
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| Physical Description: | 30 Pages |
| ISSN: | 1867-3678 |
| DOI: | 10.17192/es2024.0311 |