Renewable Energy Policies Change Carbon Emissions Even Under Emissions Trading

Delivering Energy Law and Policy in the EU and the US: A Reader. Edinburgh University Press (ISBN 9780748696796), 2016

Posted: 7 Feb 2019

See all articles by Johannes Jarke-Neuert

Johannes Jarke-Neuert

University of Hamburg - Center for Earth System Research and Sustainability (CEN)

Grischa Perino

University of Hamburg

Date Written: July 01, 2016

Abstract

In this chapter we review research that rejects the widely held tenet that renewable energy promotion policies have no effect on carbon emissions if the electricity sector is subject to a cap-and-trade scheme. Specifically, it shows that such policies generally do have a net impact on carbon emissions through inter-industry leakage effects. The results also have ramifications for the empirical assessment of renewable energy policies. Furthermore, there might be considerable long-term effects of changing the energy mix in an economy: deliberately changing the energy mix in the power sector affects baseline emissions, marginal abatement costs and the relative importance of vested interests and lobbying groups. Understanding these channels are important avenues for future research to better understand the true effects of supporting renewable energy on total long-run greenhouse gas emissions in regions subject to a cap-and-trade scheme.

Keywords: Cap-and-trade, Overlapping instruments, Leakage, Renewable energy, Climate policy, Feed-in tariff, General equilibrium

JEL Classification: D58, H23, K32, Q48, Q54, Q58

Suggested Citation

Jarke-Neuert, Johannes and Perino, Grischa, Renewable Energy Policies Change Carbon Emissions Even Under Emissions Trading (July 01, 2016). Delivering Energy Law and Policy in the EU and the US: A Reader. Edinburgh University Press (ISBN 9780748696796), 2016, Available at SSRN: https://ssrn.com/abstract=3321675

Johannes Jarke-Neuert (Contact Author)

University of Hamburg - Center for Earth System Research and Sustainability (CEN) ( email )

Bundesstrasse 53
Hamburg, Hamburg 20146
Germany

Grischa Perino

University of Hamburg ( email )

Welckerstr. 8
Hamburg, 20354
Germany

HOME PAGE: http://sites.google.com/site/gperinosite/

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