Are tradable green certificates a cost-efficient policy driving technical change or a rent-generating machine? Lessons from Sweden 2003-2008
Journal article, 2010

In the European policy debate, tradable green certificates (TGC) have been suggested to be a superior regulatory framework for promoting the diffusion of renewable electricity technologies. The purpose of this paper is to assess the performance of the Swedish TGC system, contributing to the European debate on the suitability of different types of frameworks. The expectations of the TGC system were that it would: (a) be effective in terms of increasing the supply of "green" electricity; (b) do this in a cost effective manner (from both a social and a consumer perspective): (c) generate an equitable distribution of costs and benefits and (d) drive technical change. So far, it has performed adequately in terms of effectiveness and social cost effectiveness. However, consumer costs have been substantially higher than expected, very large rents are generated and, at best, it contributes marginally to technical change. Thus. a TGC framework should be selected if the overriding concern is to minimize short term social costs of reaching a certain goal with a high degree of predictability. However, it cannot be expected to also drive technical change, keep consumer costs down and be equitable. Such trade-offs need to be revealed and not obscured by analysts.







feed-in tariffs



Technical change


renewable energy

Tradable green certificates


A. Bergek

Linköping University

Staffan Jacobsson

Chalmers, Energy and Environment, Environmental Systems Analysis

Energy Policy

0301-4215 (ISSN)

Vol. 38 3 1255-1271

Subject Categories

Other Social Sciences not elsewhere specified



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