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When should green technology support policies supplement the carbon price? The case of the electricity sector

Abstract : This thesis contributes to the literature on optimal policy choice. It studies the use of policy combinations to mitigate greenhouse gases emissions from electricity production. One finding applies to cases where uncertainty is such that the risk of a nil carbon price cannot be excluded. A cap on emissions alone may then not trigger enough abatements, justifying the addition of e.g. a renewable subsidy. When considering a transition toward a carbon-free electricity sector, capital accumulation causes complex dynamic effects to happen. We find that decisions taken by comparing the levelized costs of abatement technologies, even including carbon costs, would favor intermediate technologies (e.g. gas plants) to the detriment of more-expensive but lower-carbon technologies (renewable power), leading to a suboptimal investment schedule. This thesis also studies the effects of marginal policy changes in a mix comprising the main French instruments. We find that surprisingly, adding a tariff for renewables financed by a tax on electricity consumption to a cap on emissions and a subsidy for energy efficiency will reduce the consumer electricity price when the non-renewable production is fixed and does not depend on the carbon price. The assessment of the French climate policies in the electricity sector shows that overlapping policies for mitigation may be justified by multiple carbon price failures, even if the ideal long-term policy mix depends on the carbon price trajectory.
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Submitted on : Thursday, December 5, 2013 - 2:58:58 PM
Last modification on : Friday, August 5, 2022 - 2:38:11 PM
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  • HAL Id : tel-00914477, version 1


Oskar Lecuyer. When should green technology support policies supplement the carbon price? The case of the electricity sector. Economics and Finance. Ecole des Hautes Etudes en Sciences Sociales (EHESS), 2013. English. ⟨NNT : ⟩. ⟨tel-00914477⟩



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