Transaction Costs Analysis of Low-Carbon Technologies

Transaction costs (TCs) must be taken into account when assessing the performance of policy instruments that create markets for the diffusion and commercialization of low-carbon technologies (LCTs). However, there are no comprehensive studies on the development and application of transaction cost an...

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Main Authors:	Mundaca, Luis, Mansoz, Mathilde, Neij, Lena, Timilsina, Govinda
Format:	Journal Article
Language:	en_US
Published:	Taylor and Francis 2013
Subjects:	carbon markets energy efficiency GHG emissions greenhouse gases low-carbon technologies renewable energy transaction costs
Online Access:	http://hdl.handle.net/10986/13395

id	okr-10986-13395
recordtype	oai_dc
spelling	okr-10986-133952021-04-23T14:03:08Z Transaction Costs Analysis of Low-Carbon Technologies Mundaca, Luis Mansoz, Mathilde Neij, Lena Timilsina, Govinda carbon markets energy efficiency GHG emissions greenhouse gases low-carbon technologies renewable energy transaction costs Transaction costs (TCs) must be taken into account when assessing the performance of policy instruments that create markets for the diffusion and commercialization of low-carbon technologies (LCTs). However, there are no comprehensive studies on the development and application of transaction cost analysis to LCTs. In this meta-analysis, a wide-ranging evaluation of TCs associated with energy efficiency, renewable energy, and carbon market technologies is provided. There is a plethora of different definitions of, and measurement techniques to estimate, TCs. There is wide variation in the quantitative estimates, which can be attributed to factors such as the definition used, data collection, quantification methods, the type and size of technologies, the regulatory frameworks, the complexity of transactions, and the maturity of policy instruments. It is concluded that TCs are highly specific to both LCTs and policy instruments and that a common methodological approach is needed to avoid misleading policy analysis of the extant and future assessments. Policy relevance: Transaction costs (TCs) accrued by, for instance, the search for information, due diligence, monitoring and verification (M&V) activities, must be considered in the design, implementation, and assessment of policy instruments. Such costs can have a negative effect on the performance of policy instruments aimed at the diffusion and commercialization of low-carbon technologies. It is shown here that TC analysis is mostly technology and policy context-specific and hence that it is not advisable to make generalizations about sources and estimates. The nature and scale of TCs are likely to differ due to a variety of endogenous determinants (e.g. size and performance of technologies), exogenous drivers (e.g. regulatory policy frameworks), and methodological aspects (e.g. quantification techniques). Several measures and strategies have the potential to reduce TCs, including standardized full cost accounting systems, an ex ante M&V approach, project bundling, and streamlining of procedures. 2013-05-13T19:02:13Z 2013-05-13T19:02:13Z 2013-04-17 Journal Article Climate Policy 1469-3062 http://hdl.handle.net/10986/13395 en_US Climate Policy; CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo/ World Bank Taylor and Francis Publications & Research :: Journal Article Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	en_US
topic	carbon markets energy efficiency GHG emissions greenhouse gases low-carbon technologies renewable energy transaction costs
spellingShingle	carbon markets energy efficiency GHG emissions greenhouse gases low-carbon technologies renewable energy transaction costs Mundaca, Luis Mansoz, Mathilde Neij, Lena Timilsina, Govinda Transaction Costs Analysis of Low-Carbon Technologies
relation	Climate Policy;
description	Transaction costs (TCs) must be taken into account when assessing the performance of policy instruments that create markets for the diffusion and commercialization of low-carbon technologies (LCTs). However, there are no comprehensive studies on the development and application of transaction cost analysis to LCTs. In this meta-analysis, a wide-ranging evaluation of TCs associated with energy efficiency, renewable energy, and carbon market technologies is provided. There is a plethora of different definitions of, and measurement techniques to estimate, TCs. There is wide variation in the quantitative estimates, which can be attributed to factors such as the definition used, data collection, quantification methods, the type and size of technologies, the regulatory frameworks, the complexity of transactions, and the maturity of policy instruments. It is concluded that TCs are highly specific to both LCTs and policy instruments and that a common methodological approach is needed to avoid misleading policy analysis of the extant and future assessments. Policy relevance: Transaction costs (TCs) accrued by, for instance, the search for information, due diligence, monitoring and verification (M&V) activities, must be considered in the design, implementation, and assessment of policy instruments. Such costs can have a negative effect on the performance of policy instruments aimed at the diffusion and commercialization of low-carbon technologies. It is shown here that TC analysis is mostly technology and policy context-specific and hence that it is not advisable to make generalizations about sources and estimates. The nature and scale of TCs are likely to differ due to a variety of endogenous determinants (e.g. size and performance of technologies), exogenous drivers (e.g. regulatory policy frameworks), and methodological aspects (e.g. quantification techniques). Several measures and strategies have the potential to reduce TCs, including standardized full cost accounting systems, an ex ante M&V approach, project bundling, and streamlining of procedures.
format	Journal Article
author	Mundaca, Luis Mansoz, Mathilde Neij, Lena Timilsina, Govinda
author_facet	Mundaca, Luis Mansoz, Mathilde Neij, Lena Timilsina, Govinda
author_sort	Mundaca, Luis
title	Transaction Costs Analysis of Low-Carbon Technologies
title_short	Transaction Costs Analysis of Low-Carbon Technologies
title_full	Transaction Costs Analysis of Low-Carbon Technologies
title_fullStr	Transaction Costs Analysis of Low-Carbon Technologies
title_full_unstemmed	Transaction Costs Analysis of Low-Carbon Technologies
title_sort	transaction costs analysis of low-carbon technologies
publisher	Taylor and Francis
publishDate	2013
url	http://hdl.handle.net/10986/13395
_version_	1764423419983560704

Transaction Costs Analysis of Low-Carbon Technologies

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