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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thomas.tangeras@ifn.se

Elgar Companion to

Social Capital and Health

Martin Ljunge okt 2018.jpg

Martin Ljunge, IFN, is the author of a chapter, "Trust promotes health: addressing reverse causality by studying children of immigrants", in a new book edited by Sherman Folland and Eric Nauenberg. The cutting edge of research is presented, covering the ever-expanding social capital field.

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