Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/226367 
Year of Publication: 
2020
Series/Report no.: 
UFZ Discussion Paper No. 8/2020
Publisher: 
Helmholtz-Zentrum für Umweltforschung (UFZ), Leipzig
Abstract: 
In federal countries the allocation of renewable energy (RE) deployment is simultaneously regulated by national and subnational governments. We analyze the efficiency of federal coregulation when different types of policy instruments - price and quantity - are assigned to government levels. Using an analytical model with two regulatory levels, we specify conditions that ensure first-best allocation of RE deployment in equilibrium. These efficiency conditions refer to how the financial burden of the national RE support scheme should be shared among subnational jurisdictions. Under realistic assumptions national price-based regulation is efficient if burden shares are proportional to population shares, regardless of the subnational policy instrument. Contrary, under national quantity-based regulation efficiency conditions depend on the subnational policy instrument. While with subnational price-based regulation burden shares should be oriented towards first-best RE deployment shares, with subnational quantity-based regulation burden shares should be oriented towards population shares.
Subjects: 
multi-level governance
environmental regulation
renewable energies
tender scheme
feed-in tariff
spatial planning
JEL: 
H77
H23
Q48
D47
Document Type: 
Working Paper

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