The “My Electricity” Program as One of the Ways to Reduce CO2 Emissions in Poland

One way to reduce CO2 emissions is to replace conventional energy sources with renewable ones. In order to encourage prosumers to invest in renewable energy, EU Member States are developing renewable energy subsidy programs. In Poland, in the years 2019–2020, the “My Electricity” program was implemented, co-financing was up to 50% of eligible costs (max PLN 5000, i.e., EUR 1111), and the total cost of the program was 251 million euro. During this period, around 400,000 prosumer installations were created in Poland, including over 220,000 prosumer PV Installations under the My Electricity program. The total power of the installation under the “My Electricity” program was 1.295 GWp with an average installation power of 5.72 kWp. It is estimated that the micro-installations will produce approx. 1.4 TWh of electricity annually. Depending on the replaced source of electricity (coal, gas, mix), in the next 30 years, it will help to avoid 26.2–42.7 million Mg of greenhouse gases calculated as carbon dioxide equivalents (CO2eq). The coefficient of subsidy expenditure from the “My Electricity” program was 194 EUR/kWp, and in the next 30 years, it will be 6.52 EUR/MWh. The investment in PV will save EUR 1550 million, which would have to be incurred for the purchase of CO2 emission permits.

Lobbying for size and slice of the quota

The formation and allocation of an emission quota are analyzed in a common agency framework with two stages. First, the principals lobby for the size of the aggregate quota. Second, the principals lobby for the individual slices of the quota. It is shown that the slices are allocated such that the marginal profits of the principals are equalized and that the size of the aggregate quota is either set at the efficient level characterized by the Samuelson’s rule for public goods or distorted from that level. When the quota is distorted from the efficient level it is set such that the aggregate marginal profit is less than the marginal damage, resulting in an overallocation of individual and aggregate quotas. However, efficient level of the quota is obtained in a reasonable special case in which countries take the role of the principals. The results are extended to cover tradable emission permits.