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The institutional and socio-technical determinants of renewable energy production in the EU: implications for policy

Author

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  • Alessandro Marra

    (University d’Annunzio of Chieti and Pescara)

  • Emiliano Colantonio

    (University d’Annunzio of Chieti and Pescara)

Abstract

Despite the consensus that the transition to renewable energy is a process that encompasses institutional, regulatory, technical, political, social, and cultural aspects, such issues have rarely been addressed in a comprehensive way. This study explores the determinants of renewable energy production (REP), focusing on institutional and socio-technical aspects. We employ a panel vector autoregressive (PVAR) model to test dynamic relationships for the period 1990–2015 among several variables, as have emerged in the literature: REP, policy stringency, public awareness, lobbying, education, controlling for income and energy imports. Focusing indiscriminately on 18 European Union (EU) member states, the results show that environmental policy stringency does not influence REP, while income and education impact negatively. This evidence is counter-intuitive, and would be surprising if we did not consider the strong heterogeneity between countries. EU member states are engaging in energy transition at different speeds, depending on their individual starting point: this differs from country to country in terms of installed capacity and energy security. Moving from the recent European Green Deal, we divide the sample into two panels based on energy imports to account for different starting points: countries less active on the production side (that depends particularly on energy imports), and countries more active on the production side. Results for the first panel show that an increase in policy stringency would lead to a decrease in lobbying and an increase in REP. Policy efforts must be clearly established and consistently preserved to support REP, at least if there are increasing returns to exploit. Results for the second panel show that lobbying negatively affects the transition to REP, while an increase in public awareness will promote an increase in REP. Therefore, priority should be given to the ‘social’ aspect, and policymakers should increase efforts to reduce the proportion of energy generated from oil, natural gas, coal, and nuclear fuel.

Suggested Citation

  • Alessandro Marra & Emiliano Colantonio, 2022. "The institutional and socio-technical determinants of renewable energy production in the EU: implications for policy," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 49(2), pages 267-299, June.
    • Handle: RePEc:spr:epolin:v:49:y:2022:i:2:d:10.1007_s40812-022-00212-6
    DOI: 10.1007/s40812-022-00212-6
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    More about this item

    Keywords

    Renewable energy production; Environmental policy; Public awareness; Lobbying; Education; Income; Energy imports;
    All these keywords.

    JEL classification:

    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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