Efficiency and distributional impacts of tradable white certificates compared to taxes, subsidies and regulations

Louis-Gaëtan Giraudet, Philippe Quirion
2008 Revue d' Economie politique  
Efficiency and distributional impacts of tradable white certificates compared to taxes, subsidies and regulations Nota di lavoro // Fondazione Eni Enrico Mattei: Sustainable development, No. 88.2008 Provided in Cooperation with: Fondazione Eni Enrico Mattei (FEEM) Suggested Citation: Quirion, Philippe; Giraudet, Louis-Gaëtan (2008) : Efficiency and distributional impacts of tradable white certificates compared to taxes, subsidies and regulations, Nota di lavoro // Fondazione Eni Enrico Mattei:
more » ... Eni Enrico Mattei: Sustainable development, No. 88.2008 This Version is available at: http://hdl.handle.net/10419/53359 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Summary Tradable White Certificates (TWC) schemes, also labelled Energy-Efficiency Certificates schemes, were recently implemented in Great Britain, Italy and France. Energy suppliers have to fund a given quantity of energy efficiency measures, or to buy so-called "white certificates" from other suppliers who exceed their target. We develop a partial equilibrium model to compare TWC schemes to other policy instruments for energy efficiency, i.e., energy taxes, subsidies on energy-saving goods and regulations fixing a minimum level of energy-efficiency. The model features an endogenous level of energy service and we analyse the influence of the substitutability between energy and energy-saving goods to produce the energy service, as well as the influence of the elasticity of demand for the energy service. We show that if the level of energy service consumption is fixed, a TWC scheme is as efficient as an energy tax, but that it is much less otherwise because it does not provide the optimal incentive to reduce the consumption of energy service. This inefficiency is worsened if energy suppliers' targets are fixed rather than proportional to the suppliers' current output. On the other hand, compared to taxes, a TWC scheme allows reaching a given level of energy savings with a lower increase in the consumers' energy price, which may ease its implementation.
doi:10.3917/redp.186.0885 fatcat:vro5igwf5zg4bcqkmekr4hwr6y