Learning Curve and Wind Power

Silvia Micheli

No 81/2010, Quaderni del Dipartimento di Economia, Finanza e Statistica from Università di Perugia, Dipartimento Economia

Abstract: This study explores the reasons why countries have chosen subsidies to green electricity instead of implementing the more common Pigouvian tax on polluting emissions. I focus on the learning by doing effects from the production of wind power on the cost of future production as a justification for the observed policies. In doing so, I present two models that differ in the way I introduce learning. Under reasonable parameter values, the price paid to a firm for the energy produced from wind power is heterogeneous, and varies among the firms that produce energy from wind power according to the index of productivity of the firm itself. The suggested strategies of this research differ from the main price-driven schemes adopted by EU members; by comparing such results with European Union policy, the paper show that EU policy is not optimal.

Keywords: learning by doing; environmental policy; Pigouvian taxes; subsidies. (search for similar items in EconPapers)
JEL-codes: H23 Q48 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2010-12-01
New Economics Papers: this item is included in nep-ene, nep-env and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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