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The political economy of renewable energy policies in Germany and the EU

Author

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  • Strunz, Sebastian
  • Gawel, Erik
  • Lehmann, Paul

Abstract

In this paper, we employ a public choice perspective to analyze the development of policies for renewable energy sources (RES) in the EU in general and in Germany more specifically. In doing so, we explain the main characteristics of current RES policies by reference to the self-interest driven motivations of voters, stakeholders and political actors. One important puzzle, which we address, is the following: How could effective RES-policies be introduced against the political opposition of fossil-fuel interest groups in the past? Via analyzing the German example in more detail, we show how over time a self-reinforcing interplay of ideological and financial RES support has emerged. Moreover, we argue that observed specific design choices for RES policies in Germany, such as largely riskless remuneration schemes and high degrees of technology differentiation, as well as decentralized decision-making across EU Member States, can be traced back to politicians' need to balance a variety of partly opposing interests. A major benefit of the presented analysis is that it provides a realistic assessment of the challenges for RES policy reform – any reform effort critically depends on its ability to balance stakeholder interests.

Suggested Citation

  • Strunz, Sebastian & Gawel, Erik & Lehmann, Paul, 2016. "The political economy of renewable energy policies in Germany and the EU," Utilities Policy, Elsevier, vol. 42(C), pages 33-41.
  • Handle: RePEc:eee:juipol:v:42:y:2016:i:c:p:33-41
    DOI: 10.1016/j.jup.2016.04.005
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    Cited by:

    1. repec:kap:enreec:v:71:y:2018:i:2:d:10.1007_s10640-017-0169-9 is not listed on IDEAS
    2. Best, Rohan & Burke, Paul J., 2018. "Adoption of solar and wind energy: The roles of carbon pricing and aggregate policy support," Energy Policy, Elsevier, vol. 118(C), pages 404-417.
    3. Bigerna, Simona & Bollino, Carlo Andrea & Micheli, Silvia, 2016. "Renewable energy scenarios for costs reductions in the European Union," Renewable Energy, Elsevier, vol. 96(PA), pages 80-90.
    4. repec:eee:enepol:v:106:y:2017:i:c:p:376-381 is not listed on IDEAS
    5. repec:ags:polpwa:280730 is not listed on IDEAS
    6. Gawel, Erik & Lehmann, Paul & Purkus, Alexandra & Söderholm, Patrik & Witte, Katherina, 2016. "The rationales for technology-specific renewable energy support: Conceptual arguments and their relevance for Germany," UFZ Discussion Papers 4/2016, Helmholtz Centre for Environmental Research (UFZ), Division of Social Sciences (ÖKUS).
    7. repec:eee:ecolec:v:153:y:2018:i:c:p:68-77 is not listed on IDEAS
    8. repec:eee:renene:v:139:y:2019:i:c:p:161-175 is not listed on IDEAS
    9. Erik Gawel & Sebastian Strunz & Paul Lehmann, 2016. "Support policies for renewables Instrument choice and instrument change from a Public Choice perspective," WIDER Working Paper Series 006, World Institute for Development Economic Research (UNU-WIDER).
    10. Paul Lehmann & Patrik Söderholm, 2018. "Can Technology-Specific Deployment Policies Be Cost-Effective? The Case of Renewable Energy Support Schemes," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 71(2), pages 475-505, October.
    11. Gawel, Erik & Lehmann, Paul & Purkus, Alexandra & Söderholm, Patrik & Witte, Katherina, 2017. "Rationales for technology-specific RES support and their relevance for German policy," Energy Policy, Elsevier, vol. 102(C), pages 16-26.
    12. Grafström, Jonas & Söderholm, Patrik & Gawel, Erik & Lehmann, Paul & Strunz, Sebastian, 2017. "Knowledge Accumulation from Public Renewable Energy R&D in the European Union: Converging or Diverging Trends?," Ratio Working Papers 292, The Ratio Institute.
    13. repec:eee:enepol:v:110:y:2017:i:c:p:40-50 is not listed on IDEAS
    14. Christoph Weissbart, 2018. "Decarbonization of Power Markets under Stability and Fairness: Do They Influence Efficiency?," ifo Working Paper Series 270, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    15. repec:gam:jsusta:v:11:y:2018:i:1:p:99-:d:193033 is not listed on IDEAS

    More about this item

    Keywords

    Lobbying; Public choice; Renewable energy sources; Subsidies; Support policies;

    JEL classification:

    • D - Microeconomics
    • D - Microeconomics
    • H - Public Economics
    • K - Law and Economics
    • Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics

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