Working Paper No. 921

A Reexamination of Renewable Electricity Policy in Sweden

Published: June 18, 2012Pages: 19Keywords: Crowding out; Green certificates; NIMBY; Transaction costs; Windfall rentJEL-codes: D23; Q48; Q52; Q54
Published version

A Reexamination of Renewable Electricity Policy in Sweden Sven-Olof Fridolfsson and Thomas Tangerås


Green certificates are the main instrument for promoting renewable electricity (RES-E) in Sweden. But certificates cover only a limited share of total RES-E production. Under partial coverage, crowding out may arise whereby costly new RES-E replaces inexpensive old RES-E. Granting certificates to all of RES-E production improves efficiency, but leaves windfall rent to otherwise profitable facilities. We also analyze transaction costs in the permit process for new RES-E in Sweden. Municipalities veto socially desirable projects because of asymmetrically distributed investment costs and benefits. We propose market-based permit fees rather than limited veto rights as a solution to this NIMBY problem.

Thomas Tangerås

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Interdisciplinary European Studies

Trust in the European Union in Challenging Times

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This is the first book in the Interdisciplinary European Studies collection. This volume provides an interdisciplinary perspective on trust in the EU from the vantage point of political science, law and economics. Lars Oxelheim, Lund University and affiliated to IFN, is one of the authors.

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