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Economics/Finances Distorted Time Preferences and Structural Change in the Energy Industry

Posted on 2010-03-16




Name:Economics/Finances Distorted Time Preferences and Structural Change in the Energy Industry
ASIN/ISBN:3790821829
Language:English
File size:1.88 Mb
Publisher: Physica-Verlag Heidelberg
ISBN: 3790821829
Publish Date: edition 2009
File Type: PDF
Pages: 166 pages
File Size: 1,88 mb
   Economics/Finances Distorted Time Preferences and Structural Change in the Energy Industry

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Distorted Time Preferences and Structural Change in the Energy Industry

This study contributes to the economic discounting debate by examining the welfare and policy implications of distorted time preferences for private investments. The analysis is applied to the energy industry, where it is of particular importance. In the transition to low-carbon energy generation, distorted time preferences are shown to induce a further distortion, in addition to that from the emission externality. Its extent varies directly with the time lag in capital accumulation. In order to implement the socially optimal path, environmental policy needs to be complemented by technology policy. The theoretical findings are applied to the upcoming structural change in the German electricity industry in the 2010s.

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