Discussion Papers no. 581

On the interaction between black and green quotas

Green serves the dirtiest

Tradable black (CO2) and green (renewables) quotas gain in popularity and stringency within climate policies of many OECD countries. The overlapping regulation through both instruments, however, may have important adverse economic implications. Based on stylized theoretical analysis and substantiated with numerical model simulations for the German electricity market, we show that a green quota imposed on top of a black quota does not only induce substantial excess cost but serves the dirtiest power technologies as compared to a black quota regime only.

Om publikasjonen

Tittel

Green serves the dirtiest. On the interaction between black and green quotas

Ansvarlige

Christoph Böhringer, Knut Einar Rosendahl

Serie og -nummer

Discussion Papers no. 581

Utgiver

Statistics Norway

Emne

Discussion Papers

ISSN

1892-753X

Antall sider

25

Målform

Engelsk

Om Discussion Papers

Discussion papers comprise research papers intended for international journals and books. A preprint of a Discussion Paper may be longer and more elaborate than a standard journal article as it may include intermediate calculations, background material etc.

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