Abstract
A crucial and challenging part of the worldwide energy transition from fossil fuels to renewable energy is the decarbonization of the power sector. As governments struggle to pass politically feasible, emission-reducing policies that align with other national and international goals, empirical studies can provide insights for policymakers on the question of whether various approaches to combating climate change have effectively contributed to reducing CO2 emissions. This paper investigates the effect of several key climate policies that governments have implemented in order to reduce CO2 emission intensity in the power sector; used in this analysis are newly constructed panel data on 34 OECD countries and the 5 BRICS countries that range from 2000 to 2018. The main findings of this paper suggest that, despite a strong theoretical foundation, the market-based policy tested in this analysis does not display a significant negative effect on CO2 emission intensity. Technological innovation support-policies and deployment-support policies such as feed-in tariffs for wind power production correlate negatively with CO2 emission intensity. Feed-in tariffs for solar PV and public environmental R&D expenditure do not indicate a significant effect on emission intensity.
Highlights
The power sector is a crucial part of modern society and a significant source of global CO2 emissions worldwide
This study presents a comprehensive empirical analysis of the effects of various climate policies on the outcome of CO2 emission intensity in the OECD and BRICS power sector; I used the latest available data obtained from IEA, being the first client to receive the data on CO2 emission intensity that includes the year 2018 (IEA, 2020a)
This study investigates the effect of several prominent climate policy choices that have been implemented with the aim of reducing CO2 emissions and emission intensity in the power sector
Summary
The power sector is a crucial part of modern society and a significant source of global CO2 emissions worldwide. Given the power sector’s position in the transition from fossil fuels to renewable energy (as being arguably the primary potential enabler of a low-carbon economy), interest from scholars in this sector has been rising fast. Other researchers propose a less strictly market-based approach where supportive policies, such as feed-in tariffs, R&D funding, and technology- and innovation-support grant enterprises more room to operate in the creation of new markets; enterprises are assisted with deploying new capacity for renewable energy generation.
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