Abstract
Various environmental policy instruments supporting the development of renewable energy are used on an increasing scale as part of the policy of mitigating climate change and more. In our paper, we examine the influence of environmental policy stringency on renewable energy production in the Czech Republic, Hungary, Poland and Slovakia for the period 1993–2012 after controlling for gross domestic product per capita growth, CO2 emissions per capita and income inequality. We use the Panel Pooled Mean Group Autoregressive Distributive Lag model to analyze the long-run and the short-run relationship between restrictiveness of environmental policy and renewable energy generation. The results reveal that, in the long run, a more stringent environmental policy has a positive impact both on the increase in the absolute volume of renewable energy production, as well as on the replacement of energy from fossil sources. Our main findings indicate that renewable energy production is positively influenced not only by the stringency of instruments aimed directly at the development of this energy sector, but also by the stringency of instruments with other environmental goals and by the overall level of restrictiveness of the environmental policy.
Highlights
Renewables play a growing role in energy mixes around the world [1]
The highest level of overall stringency of environmental policy was recorded in Hungary, while, in Poland, the highest average restrictiveness of environmental taxes and emission standards was observed and, in Slovakia, subsidies
We focus on whether the development of renewable energy can be related to one of these design features, which is policy stringency, given the overall level of stringency and the stringency of individual instruments, i.e., taxes, standards and subsidies
Summary
Renewables play a growing role in energy mixes around the world [1]. The deployment of renewable energy has increased in recent years, especially in EU countries and US states [2]. Public policies supporting the development of renewable energy have been used in developed economies since 1980 and, since 2000, in an increasing number of emerging countries [5]. Environmental policies aiming at promoting renewable energy include fiscal and financial incentives, regulatory measures and strategy planning. Among these instruments, the most commonly used globally at state/provincial or national level are feed-in tariffs and renewable portfolio standards [7]. The most commonly used globally at state/provincial or national level are feed-in tariffs and renewable portfolio standards [7] Whether these various environmental (support) policy instruments are effective in promoting the development of renewable energy remains an open question. The results of empirical research in this regard bring contradictory conclusions (e.g., [2,5,8,9,10,11])
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