Modernise it, sustainabilise it! Swiss energy policy on the eve of electricity market liberalisation

In Switzerland like in many other countries, political decision makers face the two-fold challenge to adapt current electricity market regulation to a chieve different goals at the same time: market liberalisation and sustaina ble development. The general trend of the liberalisation of the electricity markets implies radical structural changes of the electricity industry as well as of the institutional rules for its regulation. But how can the over all goal of sustainable development be brought in line with the ongoing dis cussion on market (de)regulation? After reflecting on the objectives of the liberalisation process, we analyse the political acceptance of different i nstruments to achieve environmental goals in a liberalised electricity mark et; the analysis is based on empirical data from an inquiry among 250 key p layers of Swiss energy policy. We compare these outcomes to theoretical (ec onomic) insights on 'first-best', 'second-best' and 'third-best' solutions, and we conclude with a closer look at perspectives for a future energy sup ply structure in Switzerland. (C) 2000 Elsevier Science Ltd. All rights res erved.