How Regulatory Uncertainty Impedes the Reduction of Greenhouse Gas Emissions

Jens Hamprecht, David C. Sprengel and Volker H. Hoffmann
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Jens Hamprecht: Swiss Federal Institute of Technology
David C. Sprengel: Swiss Federal Institute of Technology
Volker H. Hoffmann: Swiss Federal Institute of Technology

Chapter Chapter Two in Cross-Sector Leadership for the Green Economy, 2011, pp 19-35 from Palgrave Macmillan

Abstract: Abstract Solar energy is a promising energy source for the future. During the past few years, the installed photovoltaic (PV) capacity, a form of solar energy, has been increasing, especially in Germany and Spain. However, the contribution of solar power to total power production is still negligible. The barriers slowing this transition process are manifold, but to a large extent are related to current high prices of this technology. PV technology is still in an early stage, and the transition from central power production to distributed power production brings along transition costs. The cost disadvantage of PV technology is also influenced by subsidies for conventional, nonrenewable energy sources and a lack of internalization of external costs for those sources. Furthermore, the investment profile for PV is different than competing technologies (it has a higher initial cost, lower operating cost, and lower fuel price risk). Other barriers to diffusion of solar energy are related to path dependencies (e.g., market power of incumbent energy businesses) and cognitive factors (e.g., valuation methods that favor large-scale power plants).

Keywords: Kyoto Protocol; Response Strategy; Common Method Bias; Emission Trading Scheme; Strategic Management Journal (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-137-01589-1_2

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DOI: 10.1057/9781137015891_2

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