The competitive environment of the European electricity sector in the post-Kyoto scenarios

Javier Carrillo-Hermosilla, Pablo Del Río, Totti Könnölä and Carlos García

MPRA Paper from University Library of Munich, Germany

Abstract: This paper shows how the uncertainty associated to the absence of a post-Kyoto regime regarding Greenhouse Gas mitigation is affecting investments in mitigation activities in the EU electricity sector and, thus, future emissions levels. Based on a wide survey of EU power companies, the paper identifies the most likely post-Kyoto scenarios considered by these firms and how they are coping with such uncertainty in their current investment decisions. The major conclusion is that the non-existence of a post-Kyoto regime is having a negative effect on current business investment decisions in mitigation activities, increasing risk premiums and financing costs. All in all, the companies surveyed foresee post-Kyoto compliance regimes with emissions trading systems that would guarantee the continuity of the value of the reductions made beforehand, although they differ in their perceptions of the form that a post-Kyoto regime could take.

Keywords: Post-Kyoto scenarios; EU electricity sector; investment decisions (search for similar items in EconPapers)
JEL-codes: L94 O52 Q48 Q54 (search for similar items in EconPapers)
Date: 2006-11-14
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Related works:
Working Paper: The competitive environment of the european electricity sector in the post-kyoto scenarios (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:19390

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