An Economic Analysis
Chapter 6: Policies for Clean and Renewable Energy Production
6. Policies for Clean and Renewable Energy Production In this chapter, we discuss the effects of introducing climate policies or renewable energy policies in Western Europe. All countries in Western Europe are currently committed by the Kyoto Protocol to curb their emissions of greenhouse gases over the period 2008–2012. Moreover, the European Union (EU) aims to increase the share of renewable energy in total energy use, particularly in the power sector, as a means of both reducing CO2 emissions and reducing the dependence on energy imports. The main policy instruments that we consider are carbon taxes and green certificate markets. In Sections 6.1 and 6.2, we discuss whether these instruments are cost-effective policy tools for dealing with climate and renewable energy issues. In Section 6.3, we briefly present current policies in Western Europe (mainly EU) in these areas. In Section 6.4, we present four different climate policy scenarios, and in Section 6.5, we present three different renewable energy policy scenarios. Sections 6.4 and 6.5 focus on the effects on energy markets in Western Europe and, in particular, the welfare effects of the different policies. 6.1 CARBON TAXES Standard economic theory suggests that a cost-efficient reduction in emissions of greenhouse gases (GHG) can be obtained through, e.g., a uniform tax on GHG emissions. That is, all polluting sources should face that same tax per unit of emission. The argument runs as follows. Assume the economy uses n inputs. Assume that ( n − 2) of these inputs do not lead to emissions...
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.