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Integrated Tradable Green Certificate Markets: Functioning and Compatibility

Author

Listed:
  • Amundsen, Eirik Schrøder

    (University of Bergen, Department of Economics)

  • Nese, Gjermund

    (Institute for Research in economics and Business Administration (SNF))

Abstract
Many countries plan to increase the proportion of their electricity supply obtained from renewable sources relative to nonrenewable sources. Recently, the EU has implemented a system of tradable emission permits and many countries have introduced systems of tradable green certificates (TGCs). In this paper, we analyze how integrated TGC markets function and how they are affected by harsher CO2 emission constraints. A key result of our analytical model is that TGCs may be an imprecise instrument for regulating the generation of green electricity. Furthermore, our analysis shows that the combination of TGCs with a system of tradable emission permits may yield outcomes contrary to the intended purpose. The results are valid under both autarky and international trade.

Suggested Citation

  • Amundsen, Eirik Schrøder & Nese, Gjermund, 2005. "Integrated Tradable Green Certificate Markets: Functioning and Compatibility," Working Papers in Economics 03/05, University of Bergen, Department of Economics.
    • Handle: RePEc:hhs:bergec:2005_003
    as

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    File URL: http://ekstern.filer.uib.no/svf/2005/No.%2003-05.pdf
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    References listed on IDEAS

    as
    1. Jensen, S. G. & Skytte, K., 2002. "Interactions between the power and green certificate markets," Energy Policy, Elsevier, vol. 30(5), pages 425-435, April.
    2. Hindsberger, Magnus & Nybroe, Malene Hein & Ravn, Hans F. & Schmidt, Rune, 2003. "Co-existence of electricity, TEP, and TGC markets in the Baltic Sea Region," Energy Policy, Elsevier, vol. 31(1), pages 85-96, January.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Renewable energy; electricity; green certificates; emissions trading.;
    All these keywords.

    JEL classification:

    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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