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Are public policies towards renewables successful? Evidence from European countries

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  • Marques, António Cardoso
  • Fuinhas, José Alberto

Abstract

Qualitative and theoretical literature indicates public policies as a major driver in the development of renewables. This paper empirically tests this claim, within a context of several drivers of renewables, by focusing on a large panel of European countries. Given the presence of heteroskedasticity and contemporaneous correlation resulting from the uniformity of public policies supporting renewables, we use a Panel Corrected Standard Errors estimator. Results are consistent with the usual drivers indicated by the literature and they give empirical support to the notion that public policy measures contribute, as a whole or disaggregated, to wider use of renewables. Specifically, policies of incentives/subsidies (including feed-in tariffs) and policy processes prove to be significant drivers of improved RE use. We show that the usual panel data estimators, random effects and fixed effects, are inefficient and lead to the erroneous exclusion of these policies as renewables’ drivers.

Suggested Citation

  • Marques, António Cardoso & Fuinhas, José Alberto, 2012. "Are public policies towards renewables successful? Evidence from European countries," Renewable Energy, Elsevier, vol. 44(C), pages 109-118.
  • Handle: RePEc:eee:renene:v:44:y:2012:i:c:p:109-118 DOI: 10.1016/j.renene.2012.01.007
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    Keywords

    Renewable energy; Public policies supporting renewables; Panel corrected standard errors estimator; European countries;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • N74 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - Europe: 1913-
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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