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What Drives States to Support Renewable Energy?

  • Steffen Jenner, Gabriel Chan, Rolf Frankenberger, and Mathias Gabel
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    Why do states support electricity generation from renewable energy sources? Lyon/ Yin (2010), Chandler (2009), and Huang et al. (2007) have answered this question for the adoption of renewable portfolio standards (RPS) at the U.S. state level. This article supplements their work by testing the core hypotheses on the EU27 sample between 1990 and 2010. Furthermore, the article asks why the majority of EU states relies on feed-in-tariffs (FIT). The study conducts logistic time series cross-section regression analyses that run on a hazard model. Evidence in support of private interest theory and public interest theory is provided. (a) The existence of a solar energy association increases the probability of a state to adopt regulation. (b) Solar radiation, and (c) the unemployment rate also increase the odds. (d) Electricity market concentration decreases the probability of transition.

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    Article provided by International Association for Energy Economics in its journal The Energy Journal.

    Volume (Year): Volume 33 (2012)
    Issue (Month): Number 2 ()
    Pages:

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    Handle: RePEc:aen:journl:33-2-01
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    1. Laird, Frank N. & Stefes, Christoph, 2009. "The diverging paths of German and United States policies for renewable energy: Sources of difference," Energy Policy, Elsevier, vol. 37(7), pages 2619-2629, July.
    2. Couture, Toby & Gagnon, Yves, 2010. "An analysis of feed-in tariff remuneration models: Implications for renewable energy investment," Energy Policy, Elsevier, vol. 38(2), pages 955-965, February.
    3. Paul Conway & Giuseppe Nicoletti, 2006. "Product Market Regulation in the Non-Manufacturing Sectors of OECD Countries: Measurement and Highlights," OECD Economics Department Working Papers 530, OECD Publishing.
    4. Robert O’brien, 2007. "A Caution Regarding Rules of Thumb for Variance Inflation Factors," Quality & Quantity: International Journal of Methodology, Springer, vol. 41(5), pages 673-690, October.
    5. Gary S. Becker, 1983. "A Theory of Competition Among Pressure Groups for Political Influence," The Quarterly Journal of Economics, Oxford University Press, vol. 98(3), pages 371-400.
    6. Marques, António C. & Fuinhas, José A. & Pires Manso, J.R., 2010. "Motivations driving renewable energy in European countries: A panel data approach," Energy Policy, Elsevier, vol. 38(11), pages 6877-6885, November.
    7. Thomas P. Lyon & Haitao Yin, 2010. "Why Do States Adopt Renewable Portfolio Standards?: An Empirical Investigation," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 133-158.
    8. Kiefer,Nicholas M. & Neumann,George R., 1989. "Search Models and Applied Labor Economics," Cambridge Books, Cambridge University Press, number 9780521360531, November.
    9. Keller, Sarina, 2010. "Sources of difference: In answer to the article about diverging paths of German and US policies for renewable energies," Energy Policy, Elsevier, vol. 38(8), pages 4741-4742, August.
    10. Chandler, Jess, 2009. "Trendy solutions: Why do states adopt Sustainable Energy Portfolio Standards?," Energy Policy, Elsevier, vol. 37(8), pages 3274-3281, August.
    11. Christopher R. Knittel, 2006. "THE ADOPTION OF STATE ELECTRICITY REGULATION: THE ROLE OF INTEREST GROUPS -super-," Journal of Industrial Economics, Wiley Blackwell, vol. 54(2), pages 201-222, 06.
    12. Menanteau, Philippe & Finon, Dominique & Lamy, Marie-Laure, 2003. "Prices versus quantities: choosing policies for promoting the development of renewable energy," Energy Policy, Elsevier, vol. 31(8), pages 799-812, June.
    13. Volkmar Lauber & Lutz Mez, 2004. "Three Decades of Renewable Electricity Policies in Germany," Energy & Environment, SAGE Publishing, vol. 15(4), pages 599-623, July.
    14. Kiefer, Nicholas M, 1988. "Economic Duration Data and Hazard Functions," Journal of Economic Literature, American Economic Association, vol. 26(2), pages 646-79, June.
    15. Huang, Ming-Yuan & Alavalapati, Janaki R.R. & Carter, Douglas R. & Langholtz, Matthew H., 2007. "Is the choice of renewable portfolio standards random?," Energy Policy, Elsevier, vol. 35(11), pages 5571-5575, November.
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