Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/81395
Authors: 
Fridolfsson, Sven-Olof
Tangerås, Thomas
Year of Publication: 
2012
Series/Report no.: 
IFN Working Paper 921
Abstract: 
Green certificates are the main instrument for promoting renewable electricity (RES-E) in Sweden. But certificates cover only a limited share of total RES-E production. Under partial coverage, crowding out may arise whereby costly new RES-E replaces inexpensive old RES-E. Granting certificates to all of RES-E production improves efficiency, but leaves windfall rent to otherwise profitable facilities. We also analyze transaction costs in the permit process for new RES-E in Sweden. Municipalities veto socially desirable projects because of asymmetrically distributed investment costs and benefits. We propose market-based permit fees rather than limited veto rights as a solution to this NIMBY problem.
Subjects: 
Crowding out
Green certificates
NIMBY
Transaction costs
Windfall rent
JEL: 
D23
Q48
Q52
Q54
Document Type: 
Working Paper

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