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The Contribution of Taxes, Subsidies and Regulations to British Electricity Decarbonisation

Author

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  • Green, R.
  • Staffell, I.

Abstract

Great Britain’s carbon emissions from electricity generation fell by two-thirds between 2012 and 2019, providing an important example for other nations. This rapid transition was driven by a complex interplay of policies and events: investment in renewable generation, closure of coal power stations, raising carbon prices and energy efficiency measures. Previous studies of the impact of these simultaneous individual measures miss their interactions with each other and with exogenous changes in fuel prices and the weather. Here we use Shapley values, a concept from cooperative game theory, to disentangle these and precisely attribute outcomes (CO2 saved, changes to electricity prices and fossil fuel consumption) to individual drivers. We find the effectiveness of each driver remained stable despite the transformation seen over the 7 years we study. The four main drivers each saved 19–29 MtCO2 per year in 2019, reinforcing the view that there is no ‘silver bullet’, and a multi-faceted approach to deep decarbonisation is essential.

Suggested Citation

  • Green, R. & Staffell, I., 2021. "The Contribution of Taxes, Subsidies and Regulations to British Electricity Decarbonisation," Cambridge Working Papers in Economics 2125, Faculty of Economics, University of Cambridge.
    • Handle: RePEc:cam:camdae:2125
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    Cited by:

    1. Mendes, Carla & Staffell, Iain & Green, Richard, 2024. "EuroMod: Modelling European power markets with improved price granularity," Energy Economics, Elsevier, vol. 131(C).
    2. Johan Lilliestam & Anthony Patt & Germán Bersalli, 2022. "On the quality of emission reductions: observed effects of carbon pricing on investments, innovation, and operational shifts. A response to van den Bergh and Savin (2021)," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 83(3), pages 733-758, November.
    3. Iain Staffell & Stefan Pfenninger & Nathan Johnson, 2023. "A global model of hourly space heating and cooling demand at multiple spatial scales," Nature Energy, Nature, vol. 8(12), pages 1328-1344, December.
    4. Mirosława Szewczyk & Anna Szeliga-Duchnowska, 2022. "Make Hay While the Sun Shines: Beneficiaries of Renewable Energy Promotion," Energies, MDPI, vol. 15(9), pages 1-15, May.
    5. Gransaull, Gareth & Rhodes, Ekaterina & Fairbrother, Malcolm, 2023. "Institutions for effective climate policymaking: Lessons from the case of the United Kingdom," Energy Policy, Elsevier, vol. 175(C).
    6. Tamás Orosz & Anton Rassõlkin & Pedro Arsénio & Peter Poór & Daniil Valme & Ádám Sleisz, 2024. "Current Challenges in Operation, Performance, and Maintenance of Photovoltaic Panels," Energies, MDPI, vol. 17(6), pages 1-22, March.

    More about this item

    Keywords

    Electricity Decarbonisation; Shapley Value; Carbon Pricing; Renewables;
    All these keywords.

    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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