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Measuring environmental policy stringency: Approaches, validity, and impact on environmental innovation and energy efficiency

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  • Galeotti, Marzio
  • Salini, Silvia
  • Verdolini, Elena

Abstract

Solid tests of the impact of environmental and energy policy on important economic outcomes, such as innovation, productivity, competitiveness and energy and carbon efficiency are impaired by the lack of appropriate empirical proxies for the commitment to, and stringency of, environmental policy. We contribute to the literature by: (1) computing different indicators of environmental policy stringency, (2) testing to what extent they convey similar insights through a statistical comparison exercise, and (3) showing the implications of using one or the other indicator in two illustrative empirical applications focused on environmental innovation and energy efficiency. We conclude by highlighting the implications of our analysis for empirical research focusing on the evaluation of policy impacts, and highlight fruitful future research avenues.

Suggested Citation

  • Galeotti, Marzio & Salini, Silvia & Verdolini, Elena, 2020. "Measuring environmental policy stringency: Approaches, validity, and impact on environmental innovation and energy efficiency," Energy Policy, Elsevier, vol. 136(C).
    • Handle: RePEc:eee:enepol:v:136:y:2020:i:c:s0301421519306391
    DOI: 10.1016/j.enpol.2019.111052
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    Keywords

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    JEL classification:

    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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