RES-E Policy Change

Presentation at the PhD Workshop „Forging Closer Ties“, Berlin, November 2009

Stefanie Korte

RES-E Policy Change Presentation at the PhD Workshop „Forging Closer Ties“, Berlin, November 2009, Stefanie Korte

Short Summary of PhD-Propsal

Outcome of Interest: Occurence and Level of RES-E Policy Change

Outline of Presentation

RES-E Policy Change Presentation at the PhD Workshop „Forging Closer Ties“, Berlin, November 2009, Stefanie Korte

Empirical Phenomenon

All EU member states have introduced some political support measures in order to promote RES-E technology and production.

But variation exists concerning •the time point of innovation, reform

•the RES-E policy stringency respectively the level of state intervention

Research Question

What political conditions facilitate or hinder RES-E policy change? Can political factors explain the level of RES-E policy change?

Short Summary of PhD Proposal

RES-E Policy Change Presentation at the PhD Workshop „Forging Closer Ties“, Berlin, November 2009, Stefanie Korte

Scientific Interest• Improve theoretical knowledge of (green) policy change

Theoretical Background• Veto Player Theory (Tsebelis)

• Europeanization (Radaelli, Börzel)

Research Method• Qualitative Comparative Analysis (fs/QCA)

Selected Countries• 10-15 European Countries

Unit of Observation• Legislative Periods between 1988 and 2005

Short Summary of PhD Proposal

RES-E Policy Change Presentation at the PhD Workshop „Forging Closer Ties“, Berlin, November 2009, Stefanie Korte

Different Concepts of Policy Change:

1. Peter Hall (1993)

Theoretical Background: Learning Theories

Concept of Policy Change: •1st order change: change in policy settings•2nd oder change: change in instruments •3rd order change: change in policy goals

2. George Tsebelis (2002)

Theoretical Background: Veto Player Theory

Concept of Policy Change: •Movement of status quo in policy space•Level of change is the distance between status quo ante and status quo post

Outcome of Interest: Policy Change

RES-E Policy Change Presentation at the PhD Workshop „Forging Closer Ties“, Berlin, November 2009, Stefanie Korte

Application of the Concept of Policy Change

A relevant policy change refers to a significant movement of status quo in policy space

policy space is defined as the conflict dimension between free market competition and green protectionism

RES-E policy change therefore refers to a major change in the level of state intervention into the electricity market

A RES-E policy’s level of state intervention into the electricity market = RES-E policy stringency

What are the goals of state intervention?

Outcome of Interest: Policy Change

RES-E Policy Change Presentation at the PhD Workshop „Forging Closer Ties“, Berlin, November 2009, Stefanie Korte

Goals of state intervention1. Encourage investments into RES-E technology which is nearly mature but not

competitive 2. Ensure the maintenance for long-term production of installed RES-E

technologies3. Encourage investments into less competitive technologies to diverse RES-E

production in the long run

Public RES-E Policies give incentives to invest, to maintain and to diverse RES-E capacities.

RES-E Policy Stringency

RES-E Policy Change Presentation at the PhD Workshop „Forging Closer Ties“, Berlin, November 2009, Stefanie Korte

Primary Support measures

• Feed-in tariffs

• Quota obligations

• Tender systems

Secondary Support Measures

• Investment subsidies, Soft Loans, Tax reductions on investments

• Tax incentives like energy tax exemption, carbon taxes

How do different instruments contribute to the three goals of state intervention?

Policy Instruments

RES-E Policy Change Presentation at the PhD Workshop „Forging Closer Ties“, Berlin, November 2009, Stefanie Korte

RES-E Stringency

LOW COST GAP TECHNOLOGY(E.G. HYDRO, WIND)

HIGH COST GAP TECHNOLOGY(E.G. PHOTOVOLTAIC)

INVEST• Yes, if policy refers to low cost

gap technology• Yes, if policy refers to high cost

gap technology

MAINTAIN • no • no

Investment Subsidies, Investment Tax Incentives, Soft Loans

RES-E Policy Change Presentation at the PhD Workshop „Forging Closer Ties“, Berlin, November 2009, Stefanie Korte

RES-E Stringency

LOW COST GAP, MATURE TECHNOLOGY(E.G. HYDRO, WIND)

HIGH COST GAP, LESS MATURE TECHNOLOGY(E.G. PHOTOVOLTAIC)

INVEST • no • no

MAINTAIN• yes

• incentives only low: tax can be changed or abolished

• yes

• incentives only low: tax can be changed or abolished

Energy Tax Exemptions, Carbon Tax

RES-E Policy Change Presentation at the PhD Workshop „Forging Closer Ties“, Berlin, November 2009, Stefanie Korte

RES-E Stringency

LOW COST GAP, MATURE TECHNOLOGY(E.G. HYDRO, WIND)

HIGH COST GAP, LESS MATURE TECHNOLOGY(E.G. PHOTOVOLTAIC)

INVEST• Indirectly….

• The higher guraranteed prices the stronger incentives

• Indirectly….

• The higher guaranteed prices the stronger incentives

MAINTAIN

• yes

• the longer the time period FiTs are guaranteed the stronger incentives

• yes

• the longer the time period FiTs are guaranteed the stronger incentives

Feed-in Tariffs (FiT)

RES-E Policy Change Presentation at the PhD Workshop „Forging Closer Ties“, Berlin, November 2009, Stefanie Korte

RES-E Stringency

LOW COST GAP, MATURE TECHNOLOGY(E.G. HYDRO, WIND)

HIGH COST GAP, LESS MATURE TECHNOLOGY(E.G. PHOTOVOLTAIC)

INVEST

• Indirectly….

• The higher penalties the higher incentives

• Minimum prices raise incentives

• Usually not

• Possible, if specific quota were adopted

MAINTAIN

• yes

• the longer the quota obligations last and the faster they increase the stronger incentives

• yes

• the longer the quota obligations last and the faster they increase the stronger incentives

Quota Obligation (QO)

RES-E Policy Change Presentation at the PhD Workshop „Forging Closer Ties“, Berlin, November 2009, Stefanie Korte

RES-E Stringency

LOW COST GAP, MATURE TECHNOLOGY(E.G. HYDRO, WIND)

HIGH COST GAP, LESS MATURE TECHNOLOGY(E.G. PHOTOVOLTAIC)

INVEST • Yes

• If specific tendering calls are planned

MAINTAIN• Yes

• The longer the contracts the higher incentives

• If specific tendering calls are planned

Tendering Systems

RES-E Policy Change Presentation at the PhD Workshop „Forging Closer Ties“, Berlin, November 2009, Stefanie Korte

Level of Policy Stringency • RES-E policy stringency of a national policy mix in one dimension equals the

sum of incentives given in this dimension • National RES-E policy stringency is a function of the incentives given in each of

the outlined dimensions.

Occurrence of RES-E Policy Change

• If a new policy instrument is introduced• If a policy amendment results in a change of RES-E policy stringency

Level of Policy Change• Is defined as the difference in the level of policy stringency of the status quo ante

and the status quo post.

RES-E Policy Stringency and RES-E Policy Change

RES-E Policy Change Presentation at the PhD Workshop „Forging Closer Ties“, Berlin, November 2009, Stefanie Korte

Evolution of Main Policy Support Schemes in EU-15

Source: Resch et al. 2007

RES-E Policy Change Presentation at the PhD Workshop „Forging Closer Ties“, Berlin, November 2009, Stefanie Korte

Questions for Discussion

Is the outlined application of the concept of Policy Stringency and Policy Change coherent?

Is it really feasible to operationalize the concept in order to roughly distinguish different levels of policy change?

Is it feasible to collect the data needed to measure the concept?

RES-E Policy Change Presentation at the PhD Workshop „Forging Closer Ties“, Berlin, November 2009, Stefanie Korte

Thank you for your attention!