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Title:Green serves the dirtiest : on the interaction between Black and Green Quotas PDF Logo
Authors:Böhringer, Christoph
Rosendahl, Knut Einar
Issue Date:2009
Series/Report no.:CESifo working paper 2837
Abstract:Tradable black (CO2) and green (renewables) quotas gain in popularity and stringency within climate policies of many OECD countries. The overlapping regulation through both instruments, however, may have important adverse economic implications. Based on stylized theoretical analysis and substantiated with numerical model simulations for the German electricity market, we show that a green quota imposed on top of a black quota does not only induce substantial excess cost but serves the dirtiest power technologies as compared to a black quota regime only.
Subjects:emissions trading
green quotas
overlapping regulation
JEL:D61
H21
H22
Q58
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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