Carbon abatement with renewables: Evaluating wind and solar subsidies in Germany and SpainJan Abrell, Mirjam Kosch and Sebastian Rausch Journal of Public Economics, 2019, vol. 169, issue C, 172-202 Abstract: This paper exploits the exogeneity of weather conditions to evaluate renewable energy (RE) subsidies in Germany and Spain in terms of their short-run direct program costs for reducing carbon dioxide emissions. We find that both aggregate costs and their distribution between energy producers and consumers vary significantly depending on which type of RE technology is promoted — reflecting substantial heterogeneity in production costs, temporal availability of natural resources, and market conditions, i.e., time-varying demand, carbon intensity of installed production capacities, and opportunities for cross-border trade. We estimate that the costs for reducing 1 ton of CO2 through subsidies for solar are 411 to 1944 €. Subsidizing wind entails significantly lower costs, ranging from 82 to276 €. In the short run, the economic rents for energy producers always decrease, while consumers incur four to seven times larger costs when solar is promoted but gain under RE policies promoting wind. Keywords: Decarbonization; Renewable energy policies; Wind; Solar; Electricity; Program cost; Distributional impacts (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:169:y:2019:i:c:p:172-202 DOI: 10.1016/j.jpubeco.2018.11.007 Access Statistics for this article Journal of Public Economics is currently edited by R. Boadway and J. Poterba More articles in Journal of Public Economics from Elsevier |
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