The Social Efficiency Of Instruments For The Promotion Of Renewable Energies In The Liberalised Power Industry

D. Finon
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D. Finon: CIRED - centre international de recherche sur l'environnement et le développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique

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Abstract: This paper compares the social efficiency of the two main regulatory instruments used to promote renewable energy sources in electricity generation (RES-E), taking into consideration their role in promoting the preservation of the climate. They are based on a purchase obligation and act either by price (feed-in tariffs) or by quantity (RES-E quotas). In their reference design, the instruments show different performances in several dimensions: market incentives intensity, control of the cost for consumers, safeguards of RES-E investments, and conformity with the new market regime of the electricity industry. The comparison shows that neither instrument offers an optimal solution in each of these dimensions. In particular, the intrinsic qualities of the quotas instrument that are put forward to mandate its adoption by the EU members are overestimated. A government will thus select an instrument in accordance with the relative importance of its objectives: environmental policy versus cost control by market pressure. © 2006 The Authors. Journal compilation © CIRIEC 2006.

Date: 2006
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Citations: View citations in EconPapers (8)

Published in Annals of Public and Cooperative Economics, 2006, 77 (3), pp.309. ⟨10.1111/j.1467-8292.2006.00308.x⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00716383

DOI: 10.1111/j.1467-8292.2006.00308.x

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