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ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >
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http://hdl.handle.net/10419/38923
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| Title: | | Efficient management of insecure fossil fuel Imports through taxing (!) domestic green energy?  |
| Authors: | | Eichner, Thomas Pethig, Rüdiger |
| Issue Date: | | 2010 |
| Series/Report no.: | | CESifo working paper Energy and Climate Economics 3062 |
| Abstract: | | A small open economy produces a consumer good, green and black energy, and imports fossil fuel at an uncertain price. Unregulated competitive markets are shown to be inefficient. The implied market failures are due to the agents' attitudes toward risk, to risk shifting and the uniform price for both types of energy. Under the plausible assumptions that consumers are prudent and at least as risk averse as the producers of black energy, the risk can be efficiently managed by taxing emissions and green energy. The need to tax (!) green energy contradicts the widespread view that subsidization of green energy is an appropriate means to enhance energy security in countries depending on risky fossil fuel imports. |
| Subjects: | | price uncertainty black energy green energy fossil fuel |
| JEL: | | F18 Q42 Q48 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CESifo Working Papers, CESifo Group Munich
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