Download Using Net Energy Output as the Base to Develop Renewable Energy

Using Net Energy Output as the Base
to Develop Renewable Energy
Daigee Shaw,a Ming-Feng Hungb,* and Yi-Hao Linc
a
President, Chung-Hua Institution for Economic Research, 75 Chang-Hsing St., 106, Taipei, Taiwan,
ROC.
b
Assistant Professor, Department of Industrial Economics, Tamkang University, Tamsui, 251, Taipei
County, Taiwan, ROC.
c
Research Assistant, Chung-Hua Institution for Economic Research, 75 Chang-Hsing St., 106, Taipei,
Taiwan, ROC.
ABSTRACT
In order to increase energy security, production of renewable energies has been
highly promoted by governments around the world in recent years. The typical base of
various policy instruments used for this purpose is gross energy output of renewable
energy. However, we show that basing policy instruments on gross energy output will
result in problems associated with energy waste, economic inefficiency, and negative
environmental effects. We recommend using net energy output as the base to apply
price or quantity measures because it is net energy output, not gross energy output,
that contributes to energy security. The promotion of gross energy output does not
guarantee a positive amount of net energy output. By basing policy instruments on net
energy output, energy security can be enhanced and the above mentioned problems
can be avoided.
Keywords: base; net energy output; energy security
*
Corresponding author. Tel.: +886-2-26215656 x 3345; fax: +886-2-26209731. E-mail address:
[email protected].