Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/107299
Authors: 
Requate, Till
Year of Publication: 
2014
Series/Report no.: 
CESifo Working Paper 5149
Abstract: 
The paper analyzes the relationship between CO2 mitigation policy and promotion policies designed to deploy renewable energy sources for electricity production (RES-E). If an emission cap is the only policy target, an optimal mix consisting of high and low carbon use of fossil fuels, deployment of RES-E, and energy savings can best be achieved by either setting a uniform carbon tax or by implementing a cap-and-trade system covering all CO2 sources. An additional RES-E share target causes higher costs in achieving the cap. Conversely, a more ambitious emission target automatically increases the RES-E share. In a second step we investigate different policies for inducing an RES-E quota. Such a quota can be efficiently achieved either by a system of tradable green certificates or by a budget-balancing premium system. A budget-balancing FIT system, by contrast, is not efficient, since it generates excessive fiscal distortion. We also show that differentiated, technology-specific FITs are even more inefficient.
Subjects: 
feed-in tariffs
tradable green certificates
premium systems
emission cap
cap and trade
JEL: 
L38
L51
L94
Q28
Q42
Q55
Document Type: 
Working Paper

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