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Title:
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Options for design of tradable green certificate systems
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Author(s):
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Published by:
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Publication date:
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ECN
Policy Studies
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1-3-2000
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ECN report number:
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Document type:
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ECN-C--00-032
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ECN publication
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Number of pages:
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Full text:
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88
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Download PDF
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Abstract:
The main conclusions with regard to the design of Tradable GreenCertificate (TGCs) systems for the penetration of renewable energy are as
follows. Any design of a national promotion system based on TGCs should:
provide substantial pressure to actors in the market without making it
impossible to reach their goals; provide sufficient security for investors;
provide a stable and predictable growing market for renewables over time;
incorporate flexibility mechanisms such as banking, borrowing or compliance
to targets averaged over several periods; ensure liquidity and transparency
of the TGC-market; provide customers with sufficient information to allow
them to make informed choices; anticipate on international trade of green
certificates in the future and on interaction with future Carbon Emission
Trading schemes. There are no major barriers foreseen for starting national
TGC-systems. However, for international trade several issues remain to be
solved. These include the procedure of international trade, how to deal with
different levels of subsidies and the question what country will get the
political credit if a certificate is not consumed in the country of
production but elsewhere. These difficulties indicate that formalised EU-wide
trade cannot be expected in the near future. However, it is expected that
international trade based on voluntary demand will happen soon, because this
is in principle possible without government interference. Furthermore, formal
trade between a limited number of countries, forming 'TGC-trading bubbles'
probably will already occur within the next two years. These trading bubbles
will provide a good learning ground for international trade and will largely
influence the evolution of a wider system. To ensure that the needs of later
entrants in TGC-trading are reflected, we recommend the European Commission
to set up an open discussion forum for policy makers from all Member States.
The sharing of information in such a forum will allow 'first movers' to
reflect other Member States' needs in their bilateral agreement so that entry
in a later stage will be possible more easily. 3 refs.
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