Interaction of carbon reduction and green energy promotion in a small fossil-fuel importing economy

Arbeitspapier

We study the incidence of carbon-reduction and green-energy promotion policies in a general equilibrium small open economy that depends on imports of fossil fuels. The focus is on mixed policies that are either price based (emissions taxes and producer price subsidies for green energy) or quantity based (schemes of trading emissions and green certificates). Policy instruments directed head-on toward promoting green energy are shown to also reduce carbon emissions and vice versa but the direct effects are stronger than the side effects, the more so, the greater is the elasticity of substitution in consumption between energy and consumption goods. We calculate the effects of variations in individual policy parameters on all endogenous variables, among them the energy price and the welfare costs. We also determine the impact of exogenous fossil-fuel price shocks on the economy.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Volkswirtschaftliche Diskussionsbeiträge ; No. 131-09

Classification and Topics

• Classification: Wirtschaft ; Alternative Energy Sources ; Energy and the Macroeconomy ; Energy: Government Policy ; Climate; Natural Disasters and Their Management; Global Warming
• Subject: carbon reduction ; green energy promotion ; policy mix ; interaction of policies ; Klimaschutz ; Förderung regenerativer Energien ; Policy-Mix ; Umweltökonomik ; Wirkungsanalyse ; Substitutionseffekt ; Mineralölpreisschock ; Wohlfahrtseffekt ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Pethig, Rüdiger ; Wittlich, Christian
• Event: Veröffentlichung
• (who): Universität Siegen, Fakultät III, Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht
• (where): Siegen
• (when): 2009

Further information

• Handle: http://hdl.handle.net/10419/41090
• Last update: 10.03.2025, 11:44 AM CET