December 5, 2010

Implementing the EU Renewable Target Through Green Certificate Markets

by Finn Roar Aune, Hanne Marit Dalen and Cathrine Hagem

- The EU Parliament has agreed on a target of a 20 % share of renewables in the EU’s total energy consumption by 2020. To achieve the target, the Council has adopted mandatory differentiated national targets for each of the Member States. In this paper we consider the potential for cost reductions by allowing for trade in green certificates across Member States. Our numerical model indicates that EU-wide trade in green certificates may cut the EU’s total cost of fulfilling the renewable target by as much as 70%.

Aune, F.R. H.M. Dalen and C. Hagem (2010). "Implementing the EU Renewable Target Through Green Certificate Markets." Discussion Papers 630 - Statistics Norway, Sept 2010.