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Measuring Environmental Policy Stringency: Approaches, Validity, and Impact on Energy Efficiency

Author

Listed:
  • Marzio Galeotti

    (Università degli studi di Milano, Centro Studi Luca D’Agliano, and IEFE-Bocconi)

  • Silvia Salini

    (Università degli Studi di Milano)

  • Elena Verdolini

    (Fondazione Eni Enrico Mattei and CMCC)

Abstract

Proponents of the green growth strategy worldwide hold that reductions of harmful greenhouse gas emissions through environmental policy can be pursued together with increased growth and can result in higher competitiveness. Solid tests of this theory 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, both previously used in the literature and novel, (2) testing to what extent they convey similar insights through a comparison exercise, and (3) showing the implications of using one or the other methodology in an empirical application testing whether countries with more stringent environmental and energy policy have indeed shown historically higher degree of energy efficiency. The application is cast in an Energy Kuznets Curve framework. The analysis quite naturally carries over to the role of, more generally, economic policy.

Suggested Citation

  • Marzio Galeotti & Silvia Salini & Elena Verdolini, 2017. "Measuring Environmental Policy Stringency: Approaches, Validity, and Impact on Energy Efficiency," Development Working Papers 412, Centro Studi Luca d'Agliano, University of Milano, revised 21 Feb 2017.
  • Handle: RePEc:csl:devewp:412
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Energy policy; environmental policy; ranking; Energy Kuznets Curve;

    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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