Do economic instruments matter? Wind turbine investments in the EU(15)
This paper analyses how governments in the EU(15) countries have succeeded in stimulating investments in wind turbines between 1985 and 2005. I use four different evaluation criteria (Tobin's Q, Euler equation estimation, investment accelerator model, and the effective marginal tax rate) to describe the observed investment patterns. After a period of rapid growth in capital stock (1985-2000), a period of modest growth (2001-2005) can be observed even though the economic attractiveness of investing increases modestly. This pattern cannot be explained by the evaluation criteria unless we accept economic attractiveness is a necessary condition and not a necessary and sufficient condition. When analysing which policy has worked best, the policies of Germany, Denmark and Spain stand out. Their early and consistent support has been based on feed-in tariffs combined with subsidies.
|Keywords||Difference equations, Differentiation (calculus), E62, Electric generators, Euler equations, Fiscal investment incentives, H23, Hydraulic machinery, Hydraulic motors, Investments, Public policy, Q48, Renewable energy, Subsidies, Taxation, Turbines, Wind power, Wind turbines|
|Persistent URL||dx.doi.org/10.1016/j.eneco.2008.02.005, hdl.handle.net/1765/14746|
|Series||ERIM Article Series (EAS)|
Mulder, A. (2008). Do economic instruments matter? Wind turbine investments in the EU(15). Energy Economics, 30(6), 2980–2991. doi:10.1016/j.eneco.2008.02.005