Integrating Market Based Instruments for Pollution Control - Strategic Option for Enhancing Competitiveness within Energy Industry -

The paper aims to emphasize the efficiency of using market based instruments for both reducing pollution and enhancing competitiveness within the energy industry. Given the previous experience of European countries, as well as the characteristics of the main market based instruments, the paper is focused on developing two alternatives for combining green certificates schemes, white certificates schemes and emissions trading schemes (black certificates schemes) in strategic options, aiming to increase the competitiveness of the energy industry and to decrease the emissions generated within this field. Each strategic option presented includes an integration scheme, as well as the main advantages and disadvantages deriving from the implementation of these mechanisms. The paper also demonstrates that an integrated market based instruments’ scheme is more efficient and even cost-effective than using single instruments. The whole analysis places a higher focus on white certificates, as these are the more recent market based instrument for enhancing competitiveness within energy industry.