The certification of retail energy as "green" is being criticized since a while. The principle is this: Producers of green energy get a certificate for having produced green energy. These certificated can then be traded on their own, and the buyer is allowed to attach it to non-green energy that he sells to his retail customers. In the Dutch press, there is now a neat example of how it goes wrong.

Norway produces almost exclusively green energy. Thus, their producers are issued lots of certificates. However, their Norwegian customers already know that all Norwegian energy is green, so there is no demand for the certificates for the Norwegian producers to set themselves apart from other Norwegian producers. Thus, they sell the certificates, for instance to non-green producers in the Netherlands. This is a kind of market failure, since the certificates that were given out to Norwegian producers have no actual value in Norway. It is a form of a subsidy in a market where this subsidy has no effect but create extra profits. [dutch]

Thanks to Felix Claessen for the link.

17 Jan 2013 - 4:49
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