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Optimal federal co-regulation of renewable energy deployment
[working paper]
Corporate Editor
Helmholtz-Zentrum für Umweltforschung - UFZ
Abstract
In federal countries the allocation of renewable energy (RE) deployment is simultaneously regulated by national and subnational governments. We analyze the efficiency of federal coregulation when different types of policy instruments - price and quantity - are assigned to government levels. Using a... view more
In federal countries the allocation of renewable energy (RE) deployment is simultaneously regulated by national and subnational governments. We analyze the efficiency of federal coregulation when different types of policy instruments - price and quantity - are assigned to government levels. Using an analytical model with two regulatory levels, we specify conditions that ensure first-best allocation of RE deployment in equilibrium. These efficiency conditions refer to how the financial burden of the national RE support scheme should be shared among subnational jurisdictions. Under realistic assumptions national price-based regulation is efficient if burden shares are proportional to population shares, regardless of the subnational policy instrument. Contrary, under national quantity-based regulation efficiency conditions depend on the subnational policy instrument. While with subnational price-based regulation burden shares should be oriented towards first-best RE deployment shares, with subnational quantity-based regulation burden shares should be oriented towards population shares.... view less
Keywords
multi-level-governance; renewable energy; environmental policy; energy policy; energy supply; spatial planning; Federal Republic of Germany
Classification
Special areas of Departmental Policy
Free Keywords
environmental regulation; tender scheme; feed-in tariff
Document language
English
Publication Year
2020
City
Leipzig
Page/Pages
52 p.
Series
UFZ Discussion Papers, 8/2020
ISSN
1436-140X
Status
Published Version; reviewed
Licence
Creative Commons - Attribution-NonCommercial-ShareAlike 4.0