Suchergebnisse

Abstract
Climate neutrality in Europe towards the middle of the century requires the replacement of fossil fuels by the direct or indirect use of renewable electricity in the heating and mobility sectors as well as in industry. Direct electrification and the indirect route via hydrogen are complementary. Electrification must be driven forward ambitiously in all sectors. In an integrated energy system, indirect sector coupling via hydrogen and hydrogen-based energy carriers will optimally complement electrification.

In theory, efficiency and compliance levels induced by an emission trading system should not depend on the initial allocation mechanism for permits in the absence of transaction costs. In a laboratory experiment we investigate this prediction by comparing frequent and infrequent auctioning as well as two different grandfathering schemes under market rules that closely resemble those of the European Union Emission Trading System. Our experimental results suggest that, contrary to theoretical predictions, the initial allocation procedure has the potential to affect efficiency of the final permit allocation. While we do not identify an effect of the initial allocation procedure itself (auction vs. grandfathering), we observe higher final efficiency after infrequent auctioning of permits than for frequent auctioning. Surprisingly, for a grandfathering scheme that distributes permits proportional to expected needs the high initial efficiency is substantially reduced by secondary market trading. An analysis of behavioral patterns shows that permit prices and abatement levels are initially substantially higher if permits are allocated by auction and we also find more over-banking as compared to the grandfathering treatments. Treatment differences diminish in the course of the experiment.

In this paper we provide a taxonomy of price cap regulation in oligopoly under demand uncertainty. We show that independently of the nature of uncertainty high price caps always increase production and welfare as compared to setting no price cap. We also derive conditions on the demand distribution under which a price cap close to marginal cost can be optimal and when it is not. For demand distributions with an increasing hazard rate we show that price regulation under demand uncertainty can be viewed as a well behaved extension of the analysis for deterministic demand. For this class of distributions we characterize the optimal price cap, which is unique and may or may not be close to marginal cost. Our general framework nests the limit case of deterministic demand as well as results by Earle et al. (2007), who have shown that standard arguments supporting the imposition of price caps may break down in the presence of demand uncertainty.