The Evolution of Renewable Energy Policy in OECD Countries: Aggregate Indicators and Determinants

40 Pages Posted: 4 Aug 2012

See all articles by Francesco Nicolli

Francesco Nicolli

University of Ferrara

Francesco Vona

Observatoire Français des Conjonctures Economiques (OFCE) - Department for Research on Innovation and Competition

Date Written: August 3, 2012

Abstract

This paper proposes different methods to aggregate heterogeneous policies for renewable energy. We compare time-varying indicators built using principal component analysis with average-based indicators. The main goal of the paper is to account for the evolution of both types of policy indicators with a set of common variables. Our empirical results are consistent with predictions of political-economy models of environmental policies as lobbying, income and, to a less extent, inequality have expected effects on policy. The brown lobbying power, proxied by entry barriers in the energy sector, has negative influence on the policy indicators even when taking into account endogeneity in its effect. The results are also robust to dynamic panel specifications and to the exclusion of groups of countries. Interestingly, too, corruption has only an indirect effect on policy mediated by entry barriers, while the negative effect of inequality is much stronger for the richer countries.

Keywords: Renewable Energy Policy, Political Economy, Product Market Regulation, Lobbying, Policy Indicators

JEL Classification: Q42, Q48, D72, O38

Suggested Citation

Nicolli, Francesco and Vona, Francesco, The Evolution of Renewable Energy Policy in OECD Countries: Aggregate Indicators and Determinants (August 3, 2012). FEEM Working Paper No. 51.2012. Available at SSRN: https://ssrn.com/abstract=2123094 or http://dx.doi.org/10.2139/ssrn.2123094

Francesco Nicolli

University of Ferrara ( email )

C.so Ercole I° d'Este 37
Ferrara, 44100
Italy

Francesco Vona (Contact Author)

Observatoire Français des Conjonctures Economiques (OFCE) - Department for Research on Innovation and Competition ( email )

250 rue Albert Einstein
Valbonne, 06560
France

HOME PAGE: http://www.ofce.sciences-po.fr/ofce/dric.htm

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