Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/192612 
Year of Publication: 
2010
Series/Report no.: 
Discussion Papers No. 630
Publisher: 
Statistics Norway, Research Department, Oslo
Abstract: 
The EU Parliament has agreed on a target of a 20 % share of renewables in the EU's total energy consumption by 2020. To achieve the target, the Council has adopted mandatory differentiated national targets for each of the Member States. In this paper we consider the potential for cost reductions by allowing for trade in green certificates across Member States. We show that differentiated national targets cannot ensure a cost effective implementation of the overall target for EU's green energy consumption. Trade in green certificates can ensure a cost effective distribution of green energy production, but the national targets prevents a cost effective distribution of energy consumption. Nevertheless, our numerical model indicates that EU-wide trade in green certificates may cut the EU's total cost of fulfilling the renewable target by as much as 70 % compared to a situation with no trade. However, the design of green certificate markets may have large impact on the distribution of costs across countries.
Subjects: 
Energy policy
green certificate markets
renewable targets
JEL: 
Q48
Q54
Q58
Document Type: 
Working Paper

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