Policy instruments for a market penetration of low carbon technology in developing nations
International Journal of Energy Sector Management
ISSN: 1750-6220
Article publication date: 16 November 2012
Abstract
Purpose
The purpose of this paper is to investigate impacts of policy instruments for market penetration of renewable technologies in South Africa. Based on the current debates about renewable energy policies and the comparative advantage of the country in terms of coal resources the author set up a framework focusing on renewable energy price subsidies, carbon tax and renewable energy portfolio standard.
Design/methodology/approach
Using a simulation model through a linear programming approach the paper assesses impacts of those policies on fossil fuel and renewable energy sectors via business‐as‐usual and policy option scenarios. The business‐as‐usual assumes that there are not policy instruments mobilized to promote adoption and diffusion of clean technologies instead of a policy scenario where such policies are included.
Findings
The results of the analysis show that when the coal‐based resources are integrated in the simulation process, only carbon tax and renewable energy price‐based subsidies promote a transition towards a sustainable energy production, therefore reduce the associated environmental damage.
Originality/value
Moreover, the paper also shows that in the case of carbon tax and renewable price subsidies, emission prices should be adequately scrutinized in order to guarantee a positive economic surplus.
Keywords
Citation
Racine Thiam, D. (2012), "Policy instruments for a market penetration of low carbon technology in developing nations", International Journal of Energy Sector Management, Vol. 6 No. 4, pp. 465-487. https://doi.org/10.1108/17506221211281984
Publisher
:Emerald Group Publishing Limited
Copyright © 2012, Emerald Group Publishing Limited