-and-control elements plus a sizeable abatement subsidy. Our paper informs about this tripartite climate policy, which is unique in the …

. We, first, derive analytically the optimal subsidy in a spatial partial equilibrium model of a city with two zones where … vehicles and electric vehicles. There we find that the optimal subsidy rate is the sum of changes in externality costs … simulations to calculate sign and size of the optimal subsidy or tax rate. This model is calibrated to a typical German …

three instruments: an allowance system (tradable green certificates), a subsidy system (feed-in tariffs) and a Pigouvian …

high availability. Moreover, the subsidy scheme is substantially more complex than a first-best Pigouvian tax. The optimal … renewable subsidy is always positive but tends to decrease as electricity production becomes less reliant on fossils. The … optimal storage subsidy even changes its sign. It is usually negative as long as fossils contribute to filling the storage …

small fraction of fiscal revenues from energy subsidy removal or energy taxation could be sufficient to compensate …