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Distributional Effects of Energy Transition: Impacts of Renewable Electricity Support in Germany

Author

Listed:
  • Karsten Neuhoff
  • Stefan Bach
  • Jochen Diekmann
  • Martin Beznoska
  • Tarik El-Laboudy

Abstract

The discussion of the support for renewable energy must consider the distributional impact of cost allocation. The public is sensitive to social imbalances caused by rising power prices that might jeopardize the acceptance of energy transformation. By the end of 2012 about 19 percent of German power is produced with renewables other than hydropower. As a result, German consumers will pay for global learning investment through their electricity bill. We explore the distributional implications for households using household micro data. In 2013 households will allocate 2.5% of consumption expenditure to electricity. The increase to previous years was much debated in fall of 2012, but is not without precedent. In the mid-1980s the share was 2.3%. The effect is more significant for poor households, which allocate 4.5% of expenditure for power. We propose three options how to address this distributional impact: adjusted transfers, reduced electricity taxes, and, most effectively, support to improve energy efficiency.

Suggested Citation

  • Karsten Neuhoff & Stefan Bach & Jochen Diekmann & Martin Beznoska & Tarik El-Laboudy, 2013. "Distributional Effects of Energy Transition: Impacts of Renewable Electricity Support in Germany," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 1).
    • Handle: RePEc:aen:eeepjl:2_1_a03
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    References listed on IDEAS

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    1. Gert Wagner & Jan Göbel & Peter Krause & Rainer Pischner & Ingo Sieber, 2008. "Das Sozio-oekonomische Panel (SOEP): Multidisziplinäres Haushaltspanel und Kohortenstudie für Deutschland – Eine Einführung (für neue Datennutzer) mit einem Ausblick (für erfahrene Anwender)," AStA Wirtschafts- und Sozialstatistisches Archiv, Springer;Deutsche Statistische Gesellschaft - German Statistical Society, vol. 2(4), pages 301-328, December.
    2. Don Fullerton, 2008. "Distributional Effects of Environmental and Energy Policy: An Introduction," NBER Working Papers 14241, National Bureau of Economic Research, Inc.
    3. Bardt, Hubertus, 2019. "Wirtschaft im Weltall," IW-Kurzberichte 43/2019, Institut der deutschen Wirtschaft (IW) / German Economic Institute.
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    JEL classification:

    • F0 - International Economics - - General

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