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Uncovering economic impacts and dynamics of European energy policy: Evidence from DEMATEL, panel data, and cluster analysis

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  • Aldona Kluczek
  • Agnieszka Woźniak
  • Patrycja Żegleń

Abstract

This study analyzes the relationship of national diversity in energy policies between economic outcomes amid changing energy prices, climate regulations, and technological innovations across European countries. Using DEMATEL, panel data econometric models, and cluster analysis, the research three interrelated questions: whether environmental regulations can simultaneously support economic performance and innovation; how energy prices and climate policies affect inflation, economic growth, and unemployment; and whether a hybrid causal framework can reveal deeper feedback dynamics across policy, innovation, and macroeconomic variables, The results identify significant relationships between technological innovations, energy prices, climate regulations, and inflation. The analysis reveals that energy prices influence R&D expenditure, with both positive and negative effects depending on timing. Climate regulations and inflation also significantly impact technological innovations. The findings emphasize the need for strategic planning and investment in technology to manage energy prices and climate policies effectively. The study suggests that stable, innovation-oriented regulatory frameworks are more effective than short-term interventions such as subsidies or price caps in promoting green technologies, reducing economic volatility, and supporting the transition to sustainable energy systems. Limitations include the exclusion of variables such as institutional quality, consumer behavior, and readiness for energy storage infrastructure.Further research with extended time series and localized data is recommended to deepen understanding and support resilient energy policy development.

Suggested Citation

  • Aldona Kluczek & Agnieszka Woźniak & Patrycja Żegleń, 2025. "Uncovering economic impacts and dynamics of European energy policy: Evidence from DEMATEL, panel data, and cluster analysis," PLOS ONE, Public Library of Science, vol. 20(11), pages 1-30, November.
    • Handle: RePEc:plo:pone00:0322525
    DOI: 10.1371/journal.pone.0322525
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    References listed on IDEAS

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    1. Arlan Brucal & Antoine Dechezleprêtre, 2021. "Assessing the impact of energy prices on plant-level environmental and economic performance: Evidence from Indonesian manufacturers," OECD Environment Working Papers 170, OECD Publishing.
    2. Sovacool, Benjamin K., 2013. "Energy policymaking in Denmark: Implications for global energy security and sustainability," Energy Policy, Elsevier, vol. 61(C), pages 829-839.
    3. Andrés J Picazo-Tadeo & Andrés García-Reche, 2007. "What Makes Environmental Performance Differ between Firms? Empirical Evidence from the Spanish Tile Industry," Environment and Planning A, , vol. 39(9), pages 2232-2247, September.
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