Cross-border cooperation on energy policies is crucial for achieving the ambitious goals of the low-carbon transformation in Europe and the energiewende in Germany. Because the European electricity system is so densely interconnected, reform processes in one country affect the broader European...

Our chapter surveys the literature on why market prices may provide distorted signals, i.e., diverge from socially efficient prices. There are a number of reasons for this to occur, such as price controls, externalities, imperfect competition, taxes, trade controls, etc. Broadly, market failure...