Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Electricity market’s policy instruments not a good combination

05.10.2011
While they may have similar environmental aims, the Swedish electricity market’s two policy instruments – tradable green certificates and carbon emissions allowances – are not easy bedfellows.

Although straightforward at first glance, the green certificate system turns out, on closer inspection, to be highly complicated and extremely obscure in terms of its effects, especially when combined with carbon emissions allowances.

Such is the opinion of Anna Widerberg, economics researcher at the University of Gothenburg, in her recently presented thesis on how the two policy instruments together affect the Swedish electricity market.

The Swedish electricity market features two policy instruments: tradable green certificates and carbon emissions allowances. Introduced in 2003, the green certificates aim to support the development and expansion of electricity production from renewable energy sources. Under this system all electricity suppliers must buy a specific quota of green certificates relative to the amount of electricity they supply.

This, in turn, provides electricity producers with an income from the certificates they sell. Trading in carbon emissions allowances, on the other hand, has affected all companies with carbon dioxide emissions since 2008, including electricity production from non-renewable energy sources, and aims to reduce all carbon emissions. Emissions allowances are allocated to the various companies on the basis of Sweden’s national emissions cap.

In other words, Sweden operates two completely different policy instruments with similar aims that together impact on the Swedish electricity market. In her research Widerberg has studied how they work together and come to the conclusion that this particular combination is not effective.

“A higher price for carbon emissions allowances leads to a reduction in electricity production from both renewable and non-renewable energy sources,” says Widerberg. “What’s more, it’s fairly difficult to actually work out the results needed to make decisions, and especially difficult to predict what will happen when changing the quotas.”

Widerberg recommends instead that the Swedish electricity market should be controlled through emissions trading alone, as this affects all sectors and markets.

“In isolation, each of the two systems would have worked, but together they’re less successful.”

The thesis ”Essays on Energy and Climate Policy – Green Certificates, Emissions Trading and Electricity Prices” was presented on 15 June 2011.

For further information, please contact: Anna Widerberg
Telephone: +46 (0)10 505 3130, mobile: +46 (0)72 230 4244
E-mail: anna.widerberg@economics.gu.se, anna.widerberg@afconsult.com

Helena Aaberg | idw
Further information:
http://www.gu.se
http://www.handels.gu.se/om_handelshogskolan/press/pressmeddelanden/nyheter-detalj/elmarknadens-styrmedel-ingen-lyckad-kombination-visa

More articles from Ecology, The Environment and Conservation:

nachricht How fires are changing the tundra’s face
12.12.2017 | Gesellschaft für Ökologie e.V.

nachricht Using drones to estimate crop damage by wild boars
12.12.2017 | Gesellschaft für Ökologie e.V.

All articles from Ecology, The Environment and Conservation >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: Long-lived storage of a photonic qubit for worldwide teleportation

MPQ scientists achieve long storage times for photonic quantum bits which break the lower bound for direct teleportation in a global quantum network.

Concerning the development of quantum memories for the realization of global quantum networks, scientists of the Quantum Dynamics Division led by Professor...

Im Focus: Electromagnetic water cloak eliminates drag and wake

Detailed calculations show water cloaks are feasible with today's technology

Researchers have developed a water cloaking concept based on electromagnetic forces that could eliminate an object's wake, greatly reducing its drag while...

Im Focus: Scientists channel graphene to understand filtration and ion transport into cells

Tiny pores at a cell's entryway act as miniature bouncers, letting in some electrically charged atoms--ions--but blocking others. Operating as exquisitely sensitive filters, these "ion channels" play a critical role in biological functions such as muscle contraction and the firing of brain cells.

To rapidly transport the right ions through the cell membrane, the tiny channels rely on a complex interplay between the ions and surrounding molecules,...

Im Focus: Towards data storage at the single molecule level

The miniaturization of the current technology of storage media is hindered by fundamental limits of quantum mechanics. A new approach consists in using so-called spin-crossover molecules as the smallest possible storage unit. Similar to normal hard drives, these special molecules can save information via their magnetic state. A research team from Kiel University has now managed to successfully place a new class of spin-crossover molecules onto a surface and to improve the molecule’s storage capacity. The storage density of conventional hard drives could therefore theoretically be increased by more than one hundred fold. The study has been published in the scientific journal Nano Letters.

Over the past few years, the building blocks of storage media have gotten ever smaller. But further miniaturization of the current technology is hindered by...

Im Focus: Successful Mechanical Testing of Nanowires

With innovative experiments, researchers at the Helmholtz-Zentrums Geesthacht and the Technical University Hamburg unravel why tiny metallic structures are extremely strong

Light-weight and simultaneously strong – porous metallic nanomaterials promise interesting applications as, for instance, for future aeroplanes with enhanced...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

See, understand and experience the work of the future

11.12.2017 | Event News

Innovative strategies to tackle parasitic worms

08.12.2017 | Event News

AKL’18: The opportunities and challenges of digitalization in the laser industry

07.12.2017 | Event News

 
Latest News

Long-lived storage of a photonic qubit for worldwide teleportation

12.12.2017 | Physics and Astronomy

Multi-year submarine-canyon study challenges textbook theories about turbidity currents

12.12.2017 | Earth Sciences

Electromagnetic water cloak eliminates drag and wake

12.12.2017 | Power and Electrical Engineering

VideoLinks
B2B-VideoLinks
More VideoLinks >>>