Methodology proposal for territorial distribution of greenhouse gas reduction percentages in the EU according to the strategic energy policy goal

A 20% reduction of greenhouse gas (GHG) emissions by 2020 is one of the main objectives of the European Union (EU) energy policy. However, this overall objective does not specify how it should be distributed among the Member States, according to each one’s particular characteristics. Consequently, in this article a non-linear distribution methodology with dynamic objective targets for reducing GHG emissions is proposed. The goal of this methodology is to promote debate over the weighting of these overall objectives, according to the context and characteristics of each member state. First, an analysis is conducted of the situation of greenhouse gas emissions in the reference year (1990) used by the EU for reaching its goal of reducing them by 20% by 2020, and its progress from 1990 to 2007. Then, the methodology proposed was applied for the year 2020 on two territorial aggregation levels following the EUROSTAT Nomenclature of Territorial Units for Statistics (NUTS), in the EU-15 and EU-27 member countries and on a regional level in 19 Spanish Autonomous Communities and Cities (NUTS-2). Weighting is done based on CO₂ intensity, GHG emissions per capita and GHG emissions per GDP. Finally, several recommendations are provided for the formulation of energy policies.     

Importance of integrated strategies and innovations for commercial breakthrough of fuel cells

Fuel cell based energy systems are a potential large-scale future energy option. The key challenge for fuel cells is to reach a market breakthrough which in turn requires a major cost reduction from the present level. Using a combined learning and diffusion model we have investigated effective integrated strategies that combine optimally R&D and market measures to decrease the expenditure and time needed to reach the breakeven point. The results indicate that major efforts in R&D for enhancing fuel cell innovations such as the European fuel cell and hydrogen joint technology effort would be economically well justified. Such efforts could save several billion dollars in the market deployment efforts otherwise required. Through a balanced and integrated technology push and market pull effort the time to breakthrough could similarly be reduced by 60–70%.     

On the impact of FIT policies on renewable energy investment: Based on the solar power support policies in China's power market

In 2013, the feed-in tariff (FIT) policy was issued in China to promote the investment in renewable technology, but then it was revised because this policy brought a heavy financial burden to the government. By considering the intermittence of renewable resources, we model the implemented Chinese FIT policies and analyze their impact on renewable energy investment in the power market. The open-loop model is employed to simulate the China's power market organized with Power Purchase Agreement, and the closed-loop game is used to characterize the spot power market. Meanwhile, the strategic capacity choices of power generators in two games are compared under four different policy schemes: (i) free competition, (ii) FIT via fixed subsidy, (iii) FIT via price premium and (iv) Chinese FIT by cross control (CFCC). The results show that the CFCC policy is a good alternative to well control the investment in renewable technology, as it can be seen as a comprise between free competition and FIT via fixed subsidy policy. Furthermore, compared with the other three policy schemes, the CFCC policy is capable of keeping renewable power generators from deviating the equilibrium, which implies higher robustness in regulating the electricity spot market.     

Energy policy in the Caribbean green economy context and the Institutional Analysis and Design (IAD) framework as a proposed tool for its development

Market integration efforts of Caribbean small island developing states have become transposed on the growing paradigm shift towards green economy pathways. Central to this is the challenge of implementing Caribbean energy policy in a manner that is aligned with green economy ideals and face the realities of regional indebtedness and environmental impacts. Here we analyze the current state of the Caribbean energy policy development arena and propose that the currently weak policy and institutional design regime might potentially benefit from the application of the Institutional Analysis and Design (IAD) model especially within the operational context of the green economy. It allows us to identify current policy dilemmas, bottlenecks and discrepancies and to disentangle some of them while offering up a way forward with others. We do not so much offer distinct recommendations but focus more on delineating how to clear the pathway for sound policy intervention and outcomes. By doing so we set forth a challenging agenda for future policy analysis research that will advance Caribbean energy policy in more robust ways.     

Contribution of green labels in electricity retail markets to fostering renewable energy

In European countries, retailers are obliged to disclose the energy source and the related environmental impacts of their portfolio over the preceding year. The electricity supplied in the Dutch retail market is presented as renewable energy for 34%, but this relatively high share is for 69% based on certificates (Guarantees of Origin) which are imported from in particular Norway. The certificates are used to sell green electricity to consumers. The premium for green electricity which is actually paid by Dutch consumers is no more than a few percentages of the retail price. The low level of this premium is related to the abundant supply of certificates at low marginal costs from Norway. This also means that the premium for green electricity is too low to give an incentive for investments in new capacity. Hence, the current labelling system for renewable electricity is mainly valuable, besides being an instrument for tracking and tracing of renewable energy, as a marketing instrument for electricity retailers. The effectiveness of Guarantees of Origin as a policy instrument to foster renewable electricity sources is weak. This effectiveness can be raised by implementing restrictions on the international trade or the issuance of new certificates.     

Innovation subsidies versus consumer subsidies: A real options analysis of solar energy

Given the interest in the commercialization of affordable, clean energy technologies, we examine the prospects of solar photovoltaics (PV). We consider the question of how to transition to a meaningful percentage of solar energy in a sustainable manner and which policies are most effective in accelerating adoption. This paper develops a stochastic dynamic model of the adoption of solar PV in the residential and commercial sector under two sources of uncertainty – the price of electricity and cost of solar. The analytic results suggest that a high rate of innovation may delay adoption of a new technology if the consumer has rational price expectations. We simulate the model across alternative rates technological change, electricity prices, subsidies and carbon taxes. It is shown that there will be a displacement of incumbent technologies and a widespread shift towards solar PV in under 30 years – and that this can occur without consumer incentives and carbon pricing. We show that these policies have a modest impact in accelerating adoption, and that they may not be an effective part of climate policy. Instead, results demonstrate that further technological change is the crucial determinant and main driver of adoption. Further, results indicate that subsidies and taxes become increasingly ineffective with higher rates of technological change.     

Comparative study of commercial building energy-efficiency retrofit policies in four pilot cities in China

The energy efficiency of existing commercial buildings is more challenging to regulate and improve than the energy efficiency of new constructions. In 2011 and 2012, the Chinese Government selected four cities- Shanghai, Tianjin, Shenzhen, and Chongqing- to implement pilot commercial building energy efficiency retrofit program. Based on site surveys and expert interviews in these pilot cities, this research conducted a comparative analysis on incentive policies of local city level. The analysis results show that policy designs of existing commercial buildings should be further improved. The aspects that influence the implementation effect in the future, such as subsidy level, installments, and business model promotion, should be specified in the policy clauses. Referring to the technical solution and cost-benefit in Chongqing, we found that lighting system is the most common retrofit objects while envelope system is the least common one. And the subsidy incentive is greatest for educational buildings, followed by office buildings. In the end, we further discussed the problems and obstacles in commercial building retrofit market, and provided a series of recommendations.     

Main drivers of changes in CO2 emissions in the Spanish economy: A structural decomposition analysis

The aim of this paper is the analysis of structural decomposition of changes in CO₂ emissions in Spain by using an enhanced Structural Decomposition Analysis (SDA) supported by detailed Input–Output tables from the World Input–Output Database (2013) (WIOD) for the period 1995–2009. The decomposition of changes in CO₂ emissions at sectoral level are broken down into six effects: carbonization, energy intensity, technology, structural demand, consumption pattern and scale. The results are interesting, not only for researchers but also for utility companies and policy-makers as soon as past and current political mitigation measures are analyzed in line with such results. The results allow us to conclude that the implementation of the Kyoto Protocol together with European Directives related to the promotion of RES seem to have a positive impact on CO₂ emissions trends in Spain. After reviewing the current mitigation measures in Spain, one policy recommendation is suggested to avoid the rebound effect and to enhance the fight against Climate Change that is tax benefits for those companies that prove reductions in their energy intensity ratios.     

Assessing the rebound effect using a natural experiment setting: Evidence from the private transportation sector in Israel

Subsidizing energy-efficient technologies is considered by energy and environmental organizations to be one of the most effective policies for decreasing energy consumption. In the transportation sector such policies are becoming ever more popular, and have been implemented in a considerable number of countries in recent years. Because these policies promote energy-efficient cars with lower usage costs, they may rebound and increase the distances traveled by households that have switched to energy-efficient cars. From an econometric perspective, a subsidization policy can be used as a valid instrument to identify the households’ choice of energy efficiency levels of the cars they own. This identification, in turn, can be utilized to account for endogeneity in the estimation of a rebound effect. The present study uses a natural experiment setting of such a policy implemented in Israel in 2009. The empirical results indicate a fairly large average rebound effect of 40%. The results also indicate that while the policy indeed encouraged the purchase of energy-efficient cars, households that bought a new or used car during the surveyed period did not generate a rebound effect of a different magnitude compared with other households that did not. We discuss the implications of our findings.