Internal Carbon Financing with Transferable Offsets from Renewable Portfolio Standard
- Authors
- Yu, Jongmin; Kim, Hyo-Sun
- Issue Date
- Mar-2021
- Publisher
- INT ASSOC ENERGY ECONOMICS
- Keywords
- Emission trading scheme; Renewable portfolio standard; Climate change; Market linkage
- Citation
- ENERGY JOURNAL, v.42, no.2, pp.31 - 51
- Journal Title
- ENERGY JOURNAL
- Volume
- 42
- Number
- 2
- Start Page
- 31
- End Page
- 51
- URI
- https://scholarworks.bwise.kr/hongik/handle/2020.sw.hongik/15577
- DOI
- 10.5547/01956574.42.2.joyu
- ISSN
- 0195-6574
- Abstract
- Power generation under the Renewable Portfolio Standard (RPS) can reduce greenhouse gas emissions below the baseline level, so entities may argue to use this attribute to meet the goal of Emission Trading Scheme (ETS). Although these two quantity-based regulation systems have different policy objectives, both mechanisms are implicitly linked by credit conversions depending on credit prices. This paper builds an analytic partial equilibrium model and derives market equilibria in a closed form to demonstrate how each mechanism influences the other by policy instruments such as a renewable requirement, a reduction target in greenhouse gas emission, levels of penalties, or marginal costs. We can compare "direct vs indirect" effectiveness of a regulatory changes across both markets with the case where converting renewable offsets are completed prohibited.
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Collections - School of Economics > Economics Major > 1. Journal Articles
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