Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/192592 
Authors: 
Year of Publication: 
2010
Series/Report no.: 
Discussion Papers No. 610
Publisher: 
Statistics Norway, Research Department, Oslo
Abstract: 
The European Union (EU) identified some positive and negative externalities related to energy production and consumption when adopting its Renewable Energy and Climate Change Package. Given these externalities, we derive the optimal combination of policy instruments. Thereafter, we explore the second-best outcome, given constraints on the use of some policy instruments, due to political considerations and international regulations. We show that the choice of policy instruments to promote renewable energy production (subsidies versus green certificates) affects the optimal level of energy consumption taxes. A second-best optimum for the EU cannot be achieved without a coordination of energy taxes and renewable energy policy instruments in each country, given the externalities addressed in this paper.
Subjects: 
climate policy
energy policy
green certificates
energy subsidies
energy ta
JEL: 
D62
H21
H23
Q48
Document Type: 
Working Paper

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