Liberalizing European Energy Markets

Finn Roar Aune (), Rolf Golombek, Sverre Kittelsen and Knut Einar Rosendahl

in Books from Edward Elgar Publishing

Abstract: This book presents an economic analysis of the main effects of liberalizing the electricity and natural gas markets across Western Europe. It is based on a state-of-the art detailed numerical simulation model that takes account of the interlinkages between different energy markets. Short-run and long-run effects are identified and the robustness of results is tested. Separate chapters discuss climate policy, renewable energy and the role of Russia. A key finding is that liberalization lowers energy prices and increases consumption, particularly in the electricity markets where prices fall by 25 per cent on average in the short run. Effects are somewhat stronger in the long run, as investment options are utilized. The welfare benefits of liberalization are considerable in the long run. However, liberalization increases emissions of CO2. The welfare costs of fulfilling Western Europe’s Kyoto obligations depend highly on the policies implemented, but are at least as large as the benefits of liberalization.

Keywords: Economics and Finance; Environment (search for similar items in EconPapers)
JEL-codes: H0 (search for similar items in EconPapers)
Date: 2008
ISBN: 9781843763741
References: Add references at CitEc
Citations: View citations in EconPapers (26)

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