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Title:Efficiency and distributional impacts of tradable white certificates compared to taxes, subsidies and regulations PDF Logo
Authors:Quirion, Philippe
Giraudet, Louis-Gaëtan
Issue Date:2008
Series/Report no.:Nota di lavoro // Fondazione Eni Enrico Mattei: Sustainable development 88.2008
Abstract:Tradable White Certificates (TWC) schemes, also labelled Energy-Efficiency Certificates schemes, were recently implemented in Great Britain, Italy and France. Energy suppliers have to fund a given quantity of energy efficiency measures, or to buy so-called white certificates from other suppliers who exceed their target. We develop a partial equilibrium model to compare TWC schemes to other policy instruments for energy efficiency, i.e., energy taxes, subsidies on energy-saving goods and regulations fixing a minimum level of energy-efficiency. The model features an endogenous level of energy service and we analyse the influence of the substitutability between energy and energy-saving goods to produce the energy service, as well as the influence of the elasticity of demand for the energy service. We show that if the level of energy service consumption is fixed, a TWC scheme is as efficient as an energy tax, but that it is much less otherwise because it does not provide the optimal incentive to reduce the consumption of energy service. This inefficiency is worsened if energy suppliers' targets are fixed rather than proportional to the suppliers' current output. On the other hand, compared to taxes, a TWC scheme allows reaching a given level of energy savings with a lower increase in the consumers' energy price, which may ease its implementation.
Subjects:Energy Saving Policies
Energy-Efficiency Certificates
White Certificates
Rebound Effect
JEL:Q38
Q48
Q58
Document Type:Working Paper
Appears in Collections:FEEM Working Papers, Fondazione Eni Enrico Mattei

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