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.
A Reexamination of Renewable Electricity Policy in Sweden
Vetenskaplig artikel på engelska