International Carbon Emissions Trading and Strategic Incentives to Subsidize Green Energy

Thomas Eichner and Rüdiger Pethig

No 3083, CESifo Working Paper Series from CESifo

Abstract: This paper examines strategic incentives to subsidize green energy in a group of countries that operates an international carbon emissions trading scheme. Welfare-maximizing national governments have the option to discriminate against energy from fossil fuels by subsidizing green energy, although in our model green energy promotion is not efficiency enhancing. The cases of small and large countries turn out to exhibit significantly differences. While small countries refrain from subsidizing green energy and thus implement the efficient allocation, large permit-importing countries subsidize green energy in order to influence the permit price in their favor.

Keywords: emissions trading; black energy; green energy; energy subsidies (search for similar items in EconPapers)
JEL-codes: H21 Q42 Q48 (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Journal Article: International carbon emissions trading and strategic incentives to subsidize green energy (2014)
Working Paper: International carbon emissions trading and strategic incentives to subsidize green energy (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_3083

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