Green certificate trading

This paper proceeds as follows: Section 2 briefly outlines the policy instruments available for the promotion of renewable energy sources, while section 3 discusses green certificate trading in more detail, including the green certificate market in South Africa at present. Section 4 describes the international implementation of renewable energy support mechanisms. The lessons learnt from this experience in terms of design suggestions for the development of a South African TREC framework are detailed in Section 5. Also from international experience, Section 6 provides a comparison of a feed-in tariff scheme and a quota obligation system combined with tradable green certificates. Finally, the interaction between emission trading schemes and renewable energy promotion systems are outlined in Section 7

Political economy of climate policy

Die vorliegende Arbeit beschäftigt sich modelltheoretisch, empirisch und experimentell mit dem Thema der Klimapolitik aus einer politökonomischen Perspektive. Der Ansatz der Neuen Politischen Ökonomie versucht, die ökonomischen Modelle um den politischen Prozess zu erweitern. Die Motivation für dieses Vorgehen steht in einem engen Zusammenhang mit der Erkenntnis, dass es unzureichend ist, die ökonomische Analyse auf Probleme des Marktversagens zu reduzieren. Neben Marktversagen können durch den politischen Prozess Probleme generiert werden (sog. Politikversagen). Im Rahmen einer positiven Analyse kann die Neue Politische Ökonomie Erklärungsansätze liefern, die eng mit der Fragestellung verknüpft sind, warum bekannte Ineffizienzen den politischen Prozess überdauern. Dieses Problem lässt sich in vielen Fällen durch Partikularinteressen erklären. Aus einer normativen Perspektive lassen sich die resultierenden Erkenntnisse für Politikempfehlungen heranziehen. Vordergründig sind dabei jene Handlungsalternativen (zum Teil auch Handlungsbeschränkungen z.B. auf konstitutioneller Ebene) die es dem Staat ermöglichen seine Handlungen möglichst unabhängig von Partikularinteressen durchzuführen. Die vorliegende Arbeit gliedert sich in acht Kapitel. Das erste Kapitel dient zur Einleitung. Kapitel zwei bis sieben umfassen den Hauptteil der Arbeit. In Kapitel acht werden die wesentlichen Ergebnisse noch einmal kurz zusammengefasst

Policy Change: Concept, Measurement, and Causes. An Empirical Analysis of Climate Mitigation Policy

Policy change is one of the central issues of political science, public administration, sociology, and law studies. Research on this theme dates back to the late 1950s when scholars like Herbert Simon (1957), Charles Lindblom (1959), and Thomas Kuhn (1962) postulated “that general patterns of policy development cannot only be identified but predicted“ (Howlett and Cashore, 2009). Understanding and explaining policies and policy change became important with the increasing involvement of the state in more and more realms of social life: “The modern state is widely seen as an active and as a proactive state, increasingly managing, shaping, even creating its constituent population” (Pierson, 2004a). The last two decades have seen a tremendous activity in the explanation of policy change. Debates have centered on the role of ideas, actors, and institutions as competing and coordinated explanatory accounts. However, despite a plethora of studies, there is little generalization and comparability of findings. Recently, a number of scholars have attributed this inconsistency to the lack of a common understanding and operationalization of the concept of policy change – the so-called “dependent variable problem” (Cashore and Howlett, 2007). My dissertation attempts to make three major conceptual, methodological, and explanatory contributions towards solving this problem: 1) the thesis provides a theoretical framework for policy output and develops an empirical measurement for it; 2) it argues that one needs to consider entire policy portfolios rather than individual instruments for a meaningful assessment of policy change; 3) and it analyzes how the nature of the policy field affects the assessment and explanation of policy change

Review of System Dynamics models for electricity market simulations

This paper provides a review on modeling electricity markets with System Dynamics (SD) focusing on deregulated electricity market models. First the SD method is classified within the wide field of electricity market modeling. Then all distinctive properties of the SD method in this context are elaborated. After an overview of first SD models in energy economics, a comprehensive review of models of deregulated electricity markets is presented. The review captures more than 80 publications in the field of SD energy market modeling. Some tendencies could be identified: Firstly SD models are more and more combined with other methods like generic algorithms, experimental economics or analytical hierarchy processes. Secondly, stochastic variables are considered increasingly. Thirdly, models show a higher level of detail and increasingly evaluate aspects such as new markets designs or new market components and their interdependencies

Extrapolation in Games of Coordination and Dominance Solvable Games

We study extrapolation between games in a laboratory experiment. Participants in our experiment first play either the dominance solvable guessing game or a Coordination version of the guessing game for five rounds. Afterwards they play a 3x3 normal form game for ten rounds with random matching which is either a game solvable through iterated elimination of dominated strategies (IEDS), a pure Coordination game or a Coordination game with pareto ranked equilibria. We find strong evidence that participants do extrapolate between games. Playing a strategically different game hurts compared to the control treatment where no guessing game is played before and in fact impedes convergence to Nash equilibrium in both the 3x3 IEDS and the Coordination games. Playing a strategically similar game before leads to faster convergence to Nash equilibrium in the second game. In the Coordination games some participants try to use the first game as a Coordination device. Our design and results allow us to conclude that participants do not only learn about the population and/or successful actions, but that they are also able to learn structural properties of the games.Game Theory, Learning, Extrapolation

Essays on the economics of renewable energy

Scotland is entering a transition period for its environment and economy as it decides which path to follow in meeting its energy and electric power needs over the coming decades. This thesis describes and evaluates several of the major dimensions which will contribute to those decisions and see welfare improvements for individuals and society in Scotland. Chapter One presents the current state of energy consumption in Scotland and provides technical details to understand the role of power generation. The dramatic need to plan replacement of aging power infrastructure is also documented. The United Kingdom’s international commitment to the European Union and the United nations for reducing green house gas emissions and how that commitment is shared around the world is reviewed. Finally, Scotland is compared to several European countries on the basis of government policies and attainment of renewable energy deployment. Chapter Two describes the current policy initiative in Scotland to use market mechanisms to incentivise the deployment of renewable power technologies. The operation and effectiveness of the Renewables Obligation (Scotland) program is described and analysed in depth. Chapter Three is a literature review of public perceptions, opinions and attitudes toward renewable energy. This chapter also presents evidence about the value of environmental changes that may occur with the deployment of renewable technologies. The environmental concerns examined are landscape, wildlife, and air pollution. Chapter Four presents a choice experiment to estimate the value of environmental changes and employment which may occur from renewable energy projects being built around Scotland. The household willingness-to-pay was estimated. Significant differences between urban and rural values were identified in regards to environmental impacts. Rural populations were found to value environmental impacts lower in exchange for the employment and economic development that would result locally from energy projects being built. Chapter Five discusses some of the controversial issues and technical problems with choice experiments. Chapter Six is a game theory model of interactions between small renewable energy producers and a large dominant traditional power producer. This chapter develops a model which better represents the actual behaviour and functional operating environment of the green certificate market. The model consists of two power producers producing an identical product (electricity); the dominant power producer uses only brown fuels and is required to purchase green certificates from the fringe green firm. The model attempts to find the policy and market equilibrium points for two firms trading two goods in two markets while minimising the cost to society of a green certificate program. The final chapter presents the major findings of this thesis and concludes by advocating policies which would address the goal of maximising social welfare from the deployment of renewable energy technology in Scotland

Participatory Approach in Decision Making Processes for Water Resources Management in the Mediterranean Basin

This paper deals with the comparative analysis of different policy options for water resources management in three south-eastern Mediterranean countries. The applied methodology follows a participatory approach throughout its implementation and is supported by the use of three different software packages dealing with water allocation budget, water quality simulation, and Multi Criteria Analysis, respectively. The paper briefly describes the general objectives of the SMART project and then presents the three local case studies, the valuation objectives and the applied methodology - developed as a general replicable framework suitable for implementation in other decision-making processes. All the steps needed for a correct implementation are therefore described. Following the conceptualisation of the problem, the choice of the appropriate indicators as well as the calculation of their weighting and value functions are detailed. The paper concludes with the results of the Multi Criteria and the related Sensitivity Analyses performed, showing how the different policy responses under consideration can be assessed and furthermore compared through case studies thanks to their relative performances. The adopted methodology was found to be an effective operational approach for bridging scientific modelling and policy making by integrating the model outputs in a conceptual framework that can be understood and utilised by non experts, thus showing concrete potential for participatory decision making.Scientific Advice, Policy-Making, Participatory Modelling, Decision Support

Designing an effective climate-policy mix: accounting for instrument synergy

We assess evidence from theoretical-modelling, empirical and experimental studieson how interactions between instruments of climate policy affect overall emissionsreduction. Such interactions take the form of negative, zero or positive synergisticeffects. The considered instruments comprise performance and technical standards,carbon pricing, adoption subsidies, innovation support, and information provision.Based on the findings, we formulate climate-policy packages that avoid negativeand employ positive synergies, and compare their strengths and weaknesses onother criteria. We note that the international context of climate policy has beenneglected in assessments of policy mixes, and argue that transparency andharmonization of national policies may be key to a politically feasible path to meetglobal emissio