Publication Details

Category Text Publication
Reference Category Journals
DOI 10.1016/j.enpol.2013.06.072
Title (Primary) Supplementing an emissions tax by a feed-in tariff for renewable electricity to address learning spillovers
Author Lehmann, P.
Source Titel Energy Policy
Year 2013
Department OEKON
Volume 61
Page From 635
Page To 641
Language englisch
Keywords Emissions tax; Feed-in tariff; Technological change
UFZ wide themes RU6;
Abstract

In the presence of learning spillovers related to renewable energy technologies, an optimal strategy to mitigate climate change should complement an emissions tax by a subsidy for renewables. This article addresses the question how such subsidy should be designed. It is shown that the widely-used approach of a revenue-neutral fixed feed-in tariff can yield an optimal outcome under restrictive conditions only. It has to be adapted continuously as the electricity price changes. Moreover, funding the tariff by a surcharge on the electricity price has important implications for the design of the emission tax. The optimal tax rate has to be below the Pigovian level, differentiated across fossil fuels and adapted over time as the patterns of technological development change. These requirements may pose a formidable challenge for practical decision-making. However, it is important to point out that the eventual choices made with respect to the design and funding of a feed-in tariff have to be based on a careful and more comprehensive policy assessment, including, inter alia, economic effects beyond the electricity sector and existing institutional constraints.

Persistent UFZ Identifier https://www.ufz.de/index.php?en=20939&ufzPublicationIdentifier=14266
Lehmann, P. (2013):
Supplementing an emissions tax by a feed-in tariff for renewable electricity to address learning spillovers
Energy Policy 61 , 635 - 641 10.1016/j.enpol.2013.06.072