Authors:
Mari Ito
and
Ryuta Takashima
Affiliation:
Department of Industrial Administration, Tokyo University of Science, Chiba and Japan
Keyword(s):
Cap-and-Trade, Renewable Portfolio Standards, Market Power, Social Welfare, Electricity Price.
Related
Ontology
Subjects/Areas/Topics:
Applications
;
Artificial Intelligence
;
Business Analytics
;
Cardiovascular Technologies
;
Computing and Telecommunications in Cardiology
;
Data Engineering
;
Decision Support Systems
;
Decision Support Systems, Remote Data Analysis
;
Energy and Environment
;
Health Engineering and Technology Applications
;
Knowledge-Based Systems
;
Operational Research
;
Pattern Recognition
;
Software Engineering
;
Symbolic Systems
Abstract:
Policies for reducing greenhouse gas emissions, e.g., cap-and-trade (C&T) as emissions permits trading and renewable portfolio standards (RPS) as renewable energy policies, have recently been introduced in various countries. In this study, we examine market equilibria under C&T and RPS in a bi-level optimization framework. For the lower level, generation of outputs of renewable and non-renewable sectors and electricity prices are decided by maximizing their profits. For the upper level, the policy maker chooses optimal policy level in an attempt to maximize the social welfare. Our results indicate that C&T is the best scheme for both increasing social welfare and reducing greenhouse gas emissions.