{"id":116354,"date":"2024-01-22T20:00:43","date_gmt":"2024-01-22T19:00:43","guid":{"rendered":"https:\/\/www.wifo.ac.at\/publication\/116354\/"},"modified":"2025-10-22T21:49:40","modified_gmt":"2025-10-22T19:49:40","slug":"does-a-cap-on-the-carbon-price-have-to-be-a-cap-on-green-investments","status":"publish","type":"publication","link":"https:\/\/www.wifo.ac.at\/en\/publication\/116354\/","title":{"rendered":"Does a cap on the carbon price have to be a cap on green investments?"},"content":{"rendered":"","protected":false},"featured_media":0,"template":"","class_list":["post-116354","publication","type-publication","status-publish","hentry"],"acf":{"subtitle":"","text":"Policy makers and economists are discussing a regulatory ceiling for carbon prices, acting as a \"safety valve\" for the protection of regulated businesses from unexpected price surges. While the pros and cons of such a regulatory feature are widely discussed in the literature, the optimal design of such a cap and the attendant economic and environmental consequences have yet to be subjected to quantitative analyses. We employ a Monte Carlo simulation\/dynamic programming approach to investigate the impact of different carbon price cap designs on an individual firm in the energy generation industry. Specifically, we model the firm's choice between a pulverised coal combustion plant and a combined cycle gas turbine plant, a large hydropower plant, a solid biomass plant and an on-shore wind farm. Our results show that the effects of a maximum carbon price set by the regulator is largely independent of its exact characteristics, albeit not of its level. A higher cap favours low-carbon technologies in general. However, due to differences in their cost structures, a price cap has different impacts on the relative attractiveness of the specific alternative technologies investigated.","onlinedate":"2012-05-01 02:00:00","lang":"English","publication_series":"","publication_date":"20120501","publication_date_year":"","publication_date_full":false,"publication_num_pages":"","keywords":"[]","jelcodes":"[]","related_publications":"[]","pdf":null,"zip":null,"link":"http:\/\/www.springer.com\/10663","monthly_report":false,"monthly_report_main":false,"monthly_report_volume":"39","monthly_report_pages":"217-231","monthly_report_pages_sort":"217","issue":"2","journal":"Empirica","publisher":"","invisible":false,"external":true,"embargo_date":null,"types":[83083],"research_groups":[3655],"collaboration":"","persons":[13621,13619,13617],"persons_data":"[{\"personId\":13621,\"personName\":\"Alexander Brauneis\",\"organisationNames\":[]},{\"personId\":13619,\"personName\":\"Roland Mestel\",\"organisationNames\":[]},{\"personId\":13617,\"personName\":\"Stefan Palan\",\"organisationNames\":[]}]","clients":[],"subclients":[],"partners":[],"topics":[],"host_publication_title":"","host_publication_subtitle":"","place_of_publication":"","host_publication_editors":"[]","type_description":"","output_media":"","chapter":"","article_number":"","scientific_assistance":"[]","scientific_review":"[]","version":"","release_date":null,"expiration_date":null,"surveyor":"","research_assistance":"","edv":"","additional_info_de":"","additional_info_en":""},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.3 (Yoast SEO v27.3) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Does a cap on the carbon price have to be a cap on green investments? 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