Policy Instruments and Incentives for Environmental R&D:A Market-Driven Approach

Environmental policy instruments have an impact on the incentives to invest in environmental R&D and this link should deserve careful consideration when introducing new instruments. Some authors argue that environmental taxes and tradable permits have rather comparable impacts on environmental R&D but we think that only very specific conditions do lead to this kind of conclusion. If we broaden the perspective by integrating elements from the Industrial Organisation literature and depart for Pigouvian settings, a market-driven approach would link the incentive to invest in new technologies to the market potential offered by the policy instruments. If taxes turn out to be very expensive for the polluting or emitting industries, we can assume that these targeted firms would be more interested to invest in new - emission reducing - technologies than in cases where the chosen policy instrument will lead to a very limited cost. We therefore developed a dynamic model that enables to compare the incentives on environmental R&D resulting from taxes, emission trading, voluntary approaches and subsidising environmental R&D. We do not claim to capture all relevant market interactions, but our findings confirm the intuition that environmental taxes have a clearly different impact on environmental R&D compared to emission trading.Research and Development, Environmental policy, Environmental taxes, Emission trading, Voluntary approaches, Market interactions

Prospects of electric vehicles in the developing countries : a literature review

Electric mobility offers a low cost of travel along with energy and harmful emissions savings. Nevertheless, a comprehensive literature review is missing for the prospects of electric vehicles in developing countries. Such an overview would be instrumental for policymakers to understand the barriers and opportunities related to different types of electric vehicles (EVs). Considering the Preferred Reporting Items for Systematic Reviews and Meta-analysis (PRISMA) guidelines, a systematic review was performed of the electronic databases Google Scholar and Web of Science for the years 2010–2020. The electric four-wheelers, hybrid electric vehicles and electric two-wheeler constituted the electric vehicles searched in the databases. Initially, 35 studies identified in the Web of Science that matched the criteria were studied. Later, 105 other relevant reports and articles related to barriers and opportunities were found by using Google Scholar and studied. Results reveal that electric four-wheelers are not a feasible option in developing countries due to their high purchase price. On the contrary, electric two-wheelers may be beneficial as they come with a lower purchase price

The role of biomass in the renewable energy system

Europe is striving for zero carbon electricity production by 2050 in order to avoid dangerous climate change. To meet this target a large variety of options is being explored. Biomass is such an option and should be given serious consideration. In this paper the potential role of biomass in a NW-European electricity mix is analyzed. The situation in NW-Europe is unique since it is a region which is a fore runner in renewable technology promotion but also an area with little sun, almost no potential for hydro and a lot of wind. This will result in a substantial need for non-intermittent low-carbon options such as biomass. The benefits and issues related to biomass are discussed in detail from both an environmental and an economic perspective. The former will focus on the life cycle of a biomass pellet supply chain, from the growth of the trees down to the burning of the pellets on site. The latter will provide detailed insights on the levelized cost of electricity for biomass and the role of biomass as a grid stabilizer in high intermittent scenarios. During the discussion, biomass will be compared to other competing electricity technologies to have a full understanding of its advantages and drawbacks. We find that biomass can play a very important role in the future low carbon electricity mix, the main bottleneck being the supply of large amounts of sustainably produced feedstock

Policy Instruments and Incentives for Environmental R&D:A Market-Driven Approach

Environmental policy instruments have an impact on the incentives to invest in environmental R&D and this link should deserve careful consideration when introducing new instruments. Some authors argue that environmental taxes and tradable permits have rather comparable impacts on environmental R&D but we think that only very specific conditions do lead to this kind of conclusion. If we broaden the perspective by integrating elements from the Industrial Organisation literature and depart for Pigouvian settings, a market-driven approach would link the incentive to invest in new technologies to the market potential offered by the policy instruments. If taxes turn out to be very expensive for the polluting or emitting industries, we can assume that these targeted firms would be more interested to invest in new - emission reducing - technologies than in cases where the chosen policy instrument will lead to a very limited cost. We therefore developed a dynamic model that enables to compare the incentives on environmental R&D resulting from taxes, emission trading, voluntary approaches and subsidising environmental R&D. We do not claim to capture all relevant market interactions, but our findings confirm the intuition that environmental taxes have a clearly different impact on environmental R&D compared to emission trading

Making CO 2 emission trading more effective: Integrating cross-sectoral energy efficiency opportunities

Starting from CO2 emissions data collected during both the production phase and during the lifetime of cars and trucks, we argue that impressive opportunities to reduce emissions can be found in the consumption phase. It is however obvious that energy taxes alone will not lead to a strong reduction of transport emissions. New instruments that stimulate technological innovations should therefore focus on emissions during product use. In our opinion, current designs and proposals for CO2 emission trading systems do not provide incentives to stimulate cross-sectoral energy efficiency investments like the development of cleaner cars and trucks. We think manufacturers should be "rewarded" when their products allow consumers to save energy during consumption. To adapt these flexible designs, we introduced the concept of a "tradable certificate", an allowance for each tonne CO2 avoided as a result of selling a vehicle that is much more energy efficient than other new vehicles. We then developed two dynamic models in which we linked the value of these certificates to the diffusion of the cleanest vehicles. We found that the introduction of the certificate in tradable permit systems can lead to very significant reductions of CO2 emissions. Our models indicate that emissions resulting from the car fleet can be reduced by 25 to 38% over a period of 15 years (starting in 1999). The potential of this new instrument is less spectacular for the truck market as a result of some fundamental differences compared to technological evolutions for car engines. But if the value of the certificate were high enough, emissions resulting from the truck fleet could be reduced by 12% over the same period

Nuclear and old fossil phase out scenarios : assessment of shortages, surpluses and the load factor of flexible assets with high renewable generation targets : a Belgian case study

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