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Economic Efficiency of Compulsory Green Electricity Quotas in Sweden

Author

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  • Tomas KÃ¥berger
  • Thomas Sterner
  • Max Zamanian
  • Anna Jürgensen

Abstract

Green certificates are not an efficient as a measure to correct for the effect of environmental external costs of fossil fuels and nuclear power. Nor are they efficient as a measure to create markets for new electricity supply technologies. Removing subsidies and introducing environmental taxes on energy sources with undesired external effects more efficiently corrects for incurred environmental costs. It appears that guaranteed feed-in tariffs are a more efficient policy instrument to promote the industrialisation of technologies for new sustainable sources of electricity. Alternatively, the certificate scheme could be reformed in a number of ways to improve performance. However decisions to change or abolish the instrument cannot be taken lightly since instrument stability is very important for the credibility of future policy.

Suggested Citation

  • Tomas KÃ¥berger & Thomas Sterner & Max Zamanian & Anna Jürgensen, 2004. "Economic Efficiency of Compulsory Green Electricity Quotas in Sweden," Energy & Environment, , vol. 15(4), pages 675-697, July.
    • Handle: RePEc:sae:engenv:v:15:y:2004:i:4:p:675-697
    DOI: 10.1260/0958305042259756
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    References listed on IDEAS

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    1. Lawrence H. Goulder & Ian W.H. Parry & Roberton C. Williams III & Dallas Burtraw, 2002. "The Cost-Effectiveness of Alternative Instruments for Environmental Protection in a Second-Best Setting," Chapters, in: Lawrence H. Goulder (ed.), Environmental Policy Making in Economies with Prior Tax Distortions, chapter 27, pages 523-554, Edward Elgar Publishing.
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    Cited by:

    1. Bergek, Anna & Jacobsson, Staffan, 2010. "Are tradable green certificates a cost-efficient policy driving technical change or a rent-generating machine? Lessons from Sweden 2003-2008," Energy Policy, Elsevier, vol. 38(3), pages 1255-1271, March.
    2. Strupeit, Lars & Neij, Lena, 2017. "Cost dynamics in the deployment of photovoltaics: Insights from the German market for building-sited systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 69(C), pages 948-960.
    3. Stamatios K. Chrysikopoulos & Panos T. Chountalas & Dimitrios A. Georgakellos & Athanasios G. Lagodimos, 2024. "Green Certificates Research: Bibliometric Assessment of Current State and Future Directions," Sustainability, MDPI, vol. 16(3), pages 1-45, January.
    4. Mundaca, Luis & Mansoz, Mathilde & Neij, Lena & Timilsina, Govinda R, 2013. "Transaction costs of low-carbon technologies and policies : the diverging literature," Policy Research Working Paper Series 6565, The World Bank.
    5. Eirik S. Amundsen and Lars Bergman, 2012. "Green Certificates and Market Power on the Nordic Power Market," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2).
    6. Mundaca, Luis & Román, Rocio & Cansino, José M., 2015. "Towards a Green Energy Economy? A macroeconomic-climate evaluation of Sweden’s CO2 emissions," Applied Energy, Elsevier, vol. 148(C), pages 196-209.
    7. Fouquet, Doerte & Johansson, Thomas B., 2008. "European renewable energy policy at crossroads--Focus on electricity support mechanisms," Energy Policy, Elsevier, vol. 36(11), pages 4079-4092, November.

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