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Volkswirtschaftliche Diskussionsbeiträge, Universität Siegen >
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http://hdl.handle.net/10419/41091
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| Title: | | Efficient management of insecure fossil fuel imports through taxing (!) domestic green energy?  |
| Authors: | | Eichner, Thomas Pethig, Rüdiger |
| Issue Date: | | 2009 |
| Series/Report no.: | | Volkswirtschaftliche Diskussionsbeiträge // Universität Siegen, Fachbereich Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht 138 |
| Abstract: | | A small open economy produces a consumer good along with green and black energy and imports fossil fuel for black-energy production at an uncertain world market price. Efficient risk management requires curbing fuel consumption, and hence carbon emissions, when consumers are prudent. Moreover, if consumer preferences display constant absolute risk aversion (implying prudence), an efficient response to increasing risk is promoting green energy and reducing total energy production. Unregulated competitive markets are inefficient when consumers are risk averse. With the plausible assumption of prudent consumers and risk neutral producers, taxing both fossil fuel and green energy restores efficiency. |
| Subjects: | | price uncertainty black energy green energy fossil fuel |
| JEL: | | F18 Q42 Q48 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Volkswirtschaftliche Diskussionsbeiträge, Universität Siegen
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