Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

Investment versus Output Subsidies: Implications of Alternative Incentives for Wind Energy

Investment versus Output Subsidies: Implications of Alternative Incentives for Wind Energy This study examines the choice between subsidizing investment and subsidizing output to promote socially desirable production. We exploit a natural experiment to estimate the impact of subsidy margin on the productivity of wind farms. Using instrumental variable and matching estimators, we find that investment subsidy claimants produce 10%–12% less power than they would have under the output subsidy. Accounting for extensive margin effects, we show that output subsidies are more cost-effective than investment subsidies over a large range of output targets. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of the Association of Environmental and Resource Economists University of Chicago Press

Investment versus Output Subsidies: Implications of Alternative Incentives for Wind Energy

Loading next page...
 
/lp/university-of-chicago-press/investment-versus-output-subsidies-implications-of-alternative-f0DL1pgA51

References (50)

Publisher
University of Chicago Press
Copyright
© 2023 The Association of Environmental and Resource Economists. All rights reserved.
ISSN
2333-5955
eISSN
2333-5963
DOI
10.1086/723142
Publisher site
See Article on Publisher Site

Abstract

This study examines the choice between subsidizing investment and subsidizing output to promote socially desirable production. We exploit a natural experiment to estimate the impact of subsidy margin on the productivity of wind farms. Using instrumental variable and matching estimators, we find that investment subsidy claimants produce 10%–12% less power than they would have under the output subsidy. Accounting for extensive margin effects, we show that output subsidies are more cost-effective than investment subsidies over a large range of output targets.

Journal

Journal of the Association of Environmental and Resource EconomistsUniversity of Chicago Press

Published: Jul 1, 2023

There are no references for this article.