Refunding ETS proceeds to spur the diffusion of renewable energies: An analysis based on the dynamic oligopolistic electricity market model EMELIE
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In: Utilities Policy, Vol. 19, No. 1, 01.01.2011, p. 33-41.
Research output: Journal contributions › Journal articles › Research › peer-review
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TY - JOUR
T1 - Refunding ETS proceeds to spur the diffusion of renewable energies
T2 - An analysis based on the dynamic oligopolistic electricity market model EMELIE
AU - Traber, Thure
AU - Kemfert, Claudia
PY - 2011/1/1
Y1 - 2011/1/1
N2 - We use a quantitative electricity market model to analyze the welfare effects of refunding a share of the emission trading proceeds to support renewable energy technologies that are subject to experience effects. We compare effects of supporting renewable energies under both perfect and oligopolistic competition with competitive fringe firms and emission trading regimes that achieve 70 and 80% emission reductions by 2050. The results indicate the importance of market power for renewable energy support policy. Under imperfect competition welfare improvements is maximized by refunding 10% of the emission trading proceeds, while under perfect competition the optimal refunding share is only 5%. However, under both behavioral assumptions we find significant welfare improvements due to experience effects which are induced by the support for renewable energy.
AB - We use a quantitative electricity market model to analyze the welfare effects of refunding a share of the emission trading proceeds to support renewable energy technologies that are subject to experience effects. We compare effects of supporting renewable energies under both perfect and oligopolistic competition with competitive fringe firms and emission trading regimes that achieve 70 and 80% emission reductions by 2050. The results indicate the importance of market power for renewable energy support policy. Under imperfect competition welfare improvements is maximized by refunding 10% of the emission trading proceeds, while under perfect competition the optimal refunding share is only 5%. However, under both behavioral assumptions we find significant welfare improvements due to experience effects which are induced by the support for renewable energy.
KW - Economics
KW - Experience effects
KW - Imperfect competition
KW - Emission trading
KW - Renewable energy support
UR - http://www.scopus.com/inward/record.url?scp=79251616331&partnerID=8YFLogxK
U2 - 10.1016/j.jup.2010.07.002
DO - 10.1016/j.jup.2010.07.002
M3 - Journal articles
AN - SCOPUS:79251616331
VL - 19
SP - 33
EP - 41
JO - Utilities Policy
JF - Utilities Policy
SN - 0957-1787
IS - 1
ER -