02/28/2023
New Energy Journal article: "Effect of Combining Carbon Policies and Price Controls in Cross-Border Trade of Energy on Renewable Generation Investments" by Juan Carlos Muñoz, Sebastian Oliva H., and Enzo Sauma
Clean energy policies have played an important role in encouraging an early adoption of Renewable Energy Sources (RES). Price controls on cross-border trade of energy may discourage RES investments due to the revenue reductions that base-load generation technologies (mostly RES) bear because of the price control. We assess the effectiveness of carbon policies, such as standard carbon tax and cap-and-trade programs, to promote RES investments when interacting with these price controls. Results show that carbon policies can partially offset the negative impact of price controls on RES investments and that cap-and-trade programs are more effective than carbon taxes in preventing this negative impact.
https://doi.org/10.5547/01956574.45.1.jmun