Estimating the CO2 abatement cost: Substitute Price of Avoiding CO2 Emission (SPAE) by Renewable Energy׳s Feed in Tariff in selected countries

Many renewable energy policies are looking into new incentives to absorb investments by targeting abating CO2 emission and fixing energy price fluctuation. Feed in Tariff (FIT) is a policy for rebating the amount of generated renewable electricity to investor. FIT is also defined as a CO2 mitigation policy in electricity generation from renewable sources. This paper presents a cost benefit survey that estimates the real produced carbon dioxide for electricity generation in selected countries. This study introduces the substitute price of avoiding CO2 emission as an indicator. The new indicator shows how much is paid for avoiding CO2 by each selected countries through the FIT policy for renewable technologies. The amount calculated for solar energy is taken as a case in this paper. The result confirms that the FIT policy reasonably works for solar energy in absorbing investment. However the FIT policy claims a large portion of liquidity compared with other approaches. Hence makes this mechanism inept as a CO2 mitigation policy.

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