Tradable Green Certificates as a Policy Instrument? A Discussion on the Case of Poland

Christoph Heinzel and Thomas Winkler ()
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Thomas Winkler: WSB Neue Energien GmbH

Environmental Economics Research Hub Research Reports from Environmental Economics Research Hub, Crawford School of Public Policy, The Australian National University

Abstract: Quota obligation schemes based on tradable green certificates have become a popular policy instrument to expand power generation from renewable energy sources (RES). Their application, however, can neither be justified as a first-best response to a market failure, nor, in a second-best sense, as an instrument mitigating distortionary effects of the emissions externality, if an emissions trading system exists that fully covers the energy industry. We study how ancillary reasons, in form of overcoming various barriers for RES use and establishing beneficial side-effects, such as industry development, energy security, and abatement of pollutants not covered under the ETS, apply to the scheme recently introduced in Poland. While setting substantial expansion incentives, an advantage for local industry or job-market development or energy security can hardly be seen. With rising power prices for end consumers and awareness that the extra rents from the schemes mostly accrue to foreign investors and renewable and polluting generators, we expect a negative impact on social acceptance for RES and RES deployment support policies.

Keywords: tradable green certificates; environmental policy; Poland (search for similar items in EconPapers)
Date: 2010-03
New Economics Papers: this item is included in nep-ene, nep-env and nep-eur
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