Scandinavian Working Papers in Economics

CERE Working Papers,
CERE - the Center for Environmental and Resource Economics

No 2016:19: A general equilibrium cost-bene t rule for green certi ficates

Bengt Kriström ()
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Bengt Kriström: CERE and the Department of Forest Economics, SLU, Postal: Department of Economics, Umeå University, S-901 87, Umeå, Sweden

Abstract: I embed a electricity certificate system, mandating that a certain fraction of total electricity production must come from renewable sources, in a stylized competitive economy and derive a general equilibrium cost-benefit rule from perturbing the regulation. The welfare consequences (ignoring distributional effects) of the perturbation are compactly summarized in a simple formula.

Keywords: general equilibrium; cost-benefit

JEL-codes: D50; D61

3 pages, December 9, 2016

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