Environmental cooperation among european countries
Environmental cooperation among european countries
Saturday, 6 April 2013: 8:50 AM
This paper surveys the issue of cooperation among EU countries to reach environmental policies’ objectives. The European climate package introduced in 2008 answers to the call made by the European Parliament about real measures for the transition toward a sustainable development. Cost to reach the Package’s targets vary among EU countries: given heterogeneity among countries, instruments to reach the targets have different impact on the countries’ costs. Such costs may be higher if not all EU countries take complementary and coordinated actions by implementing their own national plans. The paper aim at determining costs that arise when some countries do not take part in the Climate and energy package in reference to the renewable energies target. Participation to environmental agreements is related to the gains countries can get: climate change is a global problem and each country believes to get only small benefits compared to its effort.
We estimate costs that arise when some EU countries do not take part or partially participate in the environmental agreement through a functional form for the cost function that allows to estimate non-participation costs. We construct cost measure for solar photovoltaic, wind and biomass primary energy production on a EU regional basis in order to assess which renewable energy generation technology may be cost-competitive in a particular region. The economic feasibility of the energy production system can be evaluated using different metrics; we use the Levelized Cost of Energy (LCOE) that is most often used when comparing technologies power generation or when considering grid parity for emerging technologies (Branker et al., 2011, Darling et al., 2011, Diaf et al., 2007, Remakumar et al., 1993). A regional level of analysis is considered, rather than national, in order to identify costs with more spatial precision as renewable energies are closely related to geographical features of the site in which they are obtained, such as the intensity of solar radiation, wind intensity and characteristics and prices of raw material used for obtaining the biomass. We consider the NUTS classification (Nomenclature of territorial units for statistics) level 1 territorial units established by the Statistical Office of the European Communities in cooperation with the national institutes of the Member States. We aim at finding marginal costs of the three considered technologies in each NUTS 1 area. For this purpose we compute LCOE for each region and renewable source for a total of 291 observations. From our calculation, we show how limiting participation to the Package produces inefficiencies by rising the costs for the participating countries to the climate agreement and we highlight the problems of opportunistic behavior and inefficient outcomes that may arise from the 20-20-20 Climate and Energy Package.
We estimate costs that arise when some EU countries do not take part or partially participate in the environmental agreement through a functional form for the cost function that allows to estimate non-participation costs. We construct cost measure for solar photovoltaic, wind and biomass primary energy production on a EU regional basis in order to assess which renewable energy generation technology may be cost-competitive in a particular region. The economic feasibility of the energy production system can be evaluated using different metrics; we use the Levelized Cost of Energy (LCOE) that is most often used when comparing technologies power generation or when considering grid parity for emerging technologies (Branker et al., 2011, Darling et al., 2011, Diaf et al., 2007, Remakumar et al., 1993). A regional level of analysis is considered, rather than national, in order to identify costs with more spatial precision as renewable energies are closely related to geographical features of the site in which they are obtained, such as the intensity of solar radiation, wind intensity and characteristics and prices of raw material used for obtaining the biomass. We consider the NUTS classification (Nomenclature of territorial units for statistics) level 1 territorial units established by the Statistical Office of the European Communities in cooperation with the national institutes of the Member States. We aim at finding marginal costs of the three considered technologies in each NUTS 1 area. For this purpose we compute LCOE for each region and renewable source for a total of 291 observations. From our calculation, we show how limiting participation to the Package produces inefficiencies by rising the costs for the participating countries to the climate agreement and we highlight the problems of opportunistic behavior and inefficient outcomes that may arise from the 20-20-20 Climate and Energy Package.