Promoting Renewable Electricity Generation through Guaranteed Feed-in Tariffs vs Tradable Certificates: An Ecological Economics Perspective

For a variety of reasons it can be argued that the share of electricity generated from renewable energy sources should be increased. However, many of the new renewable energy technologies cannot yet successfully compete against conventional ones, and therefore support schemes are needed. A common approach, at least within the European Union, is the provision of guaranteed feed-in tariffs. More recently, tradable certificate schemes in connection with certain quota targets have been proposed and debated in-depth. In some countries they are already being implemented. As both guaranteed feed-in tariffs and tradable certificates are primarily justified on purely economic grounds, there is no guarantee that these policy instruments are also favoured from an ecological economics perspective. Based on arguments from co-evolutionary theory, this paper investigates the extent to which these two policy instruments can satisfy ecological and socio-economic criteria as well and enhance a certain degree of diversity of electricity generating technologies. On a conceptual level, some basic design characteristics of tradable electricity certificates and feed-in tariffs that are differentiated according to socio-economic-ecological criteria are introduced.