Interaction between an international green certificate market and other environmental policies

The project investigates the incentives for the investment in and production of renewable energy (RE). The interaction between a national RE certificate market, an international RE certificate market and other environmental policies will be analysed. The project considers both domestic and foreign RE certificate and emission quota initiatives in an effort to recommends a common international incentive system with an appropriate mix of energy taxes, governmental support for cleaner technologies, RE certificates, emission quotas, and other instruments. The international system must be coherent with a variety of national systems. The aim of the project is to consider the relative efficiency of these policy instruments and to determine whether the coexistence of instruments enhances policy efficiency. The project consists of 5 tasks: 1. Overview: The initiation and deployment of markets for RE as opposed to traditional environmental policy instruments. 2. Theory: The interaction of markets for RE with the markets for energy and national and international energy and environmental policy instruments. 3. Modelling: Development and application of a partial model based on technology specific supply curves and elasticity based demand curves. The model will determine prices on the markets for energy, certificates and emission quotas. 4. Analysis: Assessment of the effectiveness of the policy instruments with respects to energy and environmental policy, especially RE production expansion and distribution of cost. The instruments will be examined both in solitude and in coexistence with others. 5. Recommendation: The final task will produce a series of policy recommendations with respect to the use of national and international instruments together with an international market for RE certificates