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Title:Interaction of carbon reduction and green energy promotion in a small fossil-fuel importing economy PDF Logo
Authors:Pethig, Rüdiger
Wittlich, Christian
Issue Date:2009
Series/Report no.:CESifo working paper 2749
Abstract:We study the incidence of carbon-reduction and green-energy promotion policies in an open fossil-fuel importing general equilibrium economy. The focus is on mixed price-based or quantity-based policies. Instruments directed toward promoting green energy are shown to reduce also carbon emissions and vice versa. Their direct effects are stronger than their side effects, the more so, the greater is the elasticity of substitution in consumption between en-ergy and the consumption good. We calculate the effects of variations in individual policy parameters, especially on energy prices and welfare costs, and determine the impact of exoge-nous fossil-fuel price shocks on the economy.
Subjects:carbon reduction
green energy promotion
policy mix
interaction of policies
JEL:Q42
Q43
Q48
Q54
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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