Tradable Green Certificates in selected European countries—overview and assessment

Tradable Green Certificates (TGCs) is a new market-based, cost-efficient instrument to regulate the deployment of renewable energy. A European system of TGCs is currently being considered by the European Commission. However, a number of EU countries are either already in the process of designing a system of TGCs or are considering the use of TGCs. Consequently, a European system of TGCs may evolve as a harmonisation of different national systems. We show that due to different political priorities, national systems of TGCs differ on four crucial points. If these points are not harmonised prior to the establishment of a European TGC system, efficiency is unlikely to be obtained. Potential obstacles to the harmonisation of a TGC market will be identified and analysed. Finally, the paper examines the relation between EUʹs state aid policies and a system of TGCs.