 Should renewable energy policy be ‘renewable’?Erik Gawel and Paul Lehmann Oxford Review of Economic Policy, 2019, vol. 35, issue 2, 218-243 Abstract: Political flexibility brings about trade-offs for policy-makers aiming to support the deployment of renewable energy sources (RES). On the one hand, it allows incorporating new information on ex ante uncertain benefits and costs of RES policy. On the other hand, it may deter RES investments. This paper scrutinizes how these trade-offs play out economically and politically when RES policy-makers choose the degree of flexibility as well as the instruments to implement flexibility. The analysis builds on a theoretical framework distinguishing between flexibility by design and by adjustment. It is complemented by a discussion of three case studies: RES support schemes in Germany and the United Kingdom, and the EU Emissions Trading Scheme. Theoretical as well as empirical results suggest that the politically chosen degree of flexibility by policy design may be sub-optimally low. In contrast, flexibility by policy adjustment is often excessively high. Keywords: commitment; EU Emissions Trading Scheme; feed-in tariff; flexibility; Germany; Renewables Obligation; United Kingdom (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:oup:oxford:v:35:y:2019:i:2:p:218-243. Access Statistics for this article Oxford Review of Economic Policy is currently edited by Christopher Adam More articles in Oxford Review of Economic Policy from Oxford University Press and Oxford Review of Economic Policy Limited |
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