Publication type: Article in scientific journal
Type of review: Peer review (publication)
Title: The economics of renewable energy support
Authors: Abrell, Jan
Rausch, Sebastian
Streitberger, Clemens
et. al: No
DOI: 10.1016/j.jpubeco.2019.06.002
Published in: Journal of Public Economics
Volume(Issue): 176
Pages: 94
Pages to: 117
Issue Date: 2019
Publisher / Ed. Institution: Elsevier
ISSN: 0047-2727
Language: English
Subject (DDC): 333.79: Energy
Abstract: This paper uses theoretical and numerical economic equilibrium models to examine optimal renewable energy (RE) support policies for wind and solar resources in the presence of a carbon externality associated with the use of fossil fuels. We emphasize three main issues for policy design: the heterogeneity of intermittent natural resources, budget-neutral financing rules, and incentives for carbon mitigation. We find that differentiated subsidies for wind and solar, while being optimal, only yield negligible efficiency gains. Policies with smart financing of RE subsidies which either relax budget neutrality or use polluter-pays financing in the context of budget-neutral schemes can, however, approximate socially optimal outcomes. Our analysis suggests that optimally designed RE support policies do not necessarily have to be viewed as a costly second-best option when carbon pricing is navailable.
Fulltext version: Published version
License (according to publishing contract): Licence according to publishing contract
Departement: School of Management and Law
Organisational Unit: Center for Energy and Environment (CEE)
Appears in collections:Publikationen School of Management and Law

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