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The Evolution of Renewable Energy Policy in OECD Countries: Aggregate Indicators and Determinants

  • Francesco Nicolli

    (University of Ferrara)

  • Francesco Vona

    (OFCE Sciences-Po and Skema Business School)

This paper proposes different methods to aggregate heterogeneous policies for renewable energy. We compare time-varying indicators built using principal component analysis with average-based indicators. The main goal of the paper is to account for the evolution of both types of policy indicators with a set of common variables. Our empirical results are consistent with predictions of political-economy models of environmental policies as lobbying, income and, to a less extent, inequality have expected effects on policy. The brown lobbying power, proxied by entry barriers in the energy sector, has negative influence on the policy indicators even when taking into account endogeneity in its effect. The results are also robust to dynamic panel specifications and to the exclusion of groups of countries. Interestingly, too, corruption has only an indirect effect on policy mediated by entry

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Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2012.51.

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Date of creation: Jul 2012
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Handle: RePEc:fem:femwpa:2012.51
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