ABSTRACT
This book analyses the responses to climate change in the power sector in a relatively homogeneous set of countries, all members of the EU. However, the countries use a wide spread of economic instruments for a variety of reasons. This chapter first outlines the economic instruments available for use in national policy and industry responses to them. These economic instruments can be classified under three headings: regulatory, fiscal and flexible instruments. However, many instruments have characteristics of more than one category. The often-used renewables portfolio requirement combines a regulatory approach, demanding a minimum percentage of renewables, with a flexible approach, by allowing trade in green certificates, and sometimes fiscal elements too, for example, subsidies or special tariffs.
