This is a Free article. You will receive access to the full text.

Market and Non-market Policies for Renewable Energy Diffusion: A Unifying Framework and Empirical Evidence from China’s Wind Power Sector

Free Article

We provide a comprehensive framework of analyzing the diffusion process of renewable technology, incorporating epidemic and pecuniary effects. Relying on a panel dataset consisting of information from 1207 CDM wind projects in thirty provinces over the period 2004-2011, we find strong evidence on the dominant role of the epidemic effect and new evidence on pecuniary effects that generate a diminishing marginal effect of profitability in inducing technology adoption. Our numerical simulation demonstrates that the epidemic effect can play a quantitatively important role in the spread of renewable energy technology and markedly enhance the optimal social welfare. Our findings convey important policy implications for regulators when choosing policy instruments to enhance the diffusion and adoption of clean technology. Price instruments should be complemented by a wide range of non-market instruments to address non-market barriers. Policy interventions should be taken using a systemic approach.

Download Executive Summary Download PDF

JEL Codes: Q42: Alternative Energy Sources, Q54: Climate; Natural Disasters and Their Management; Global Warming, Q41: Energy: Demand and Supply; Prices, Q20: Renewable Resources and Conservation: General, C58: Financial Econometrics, Q21: Renewable Resources and Conservation: Demand and Supply; Prices

Keywords: Technology diffusion, Incentive policies, Renewable energy, Technological change

DOI: 10.5547/01956574.37.SI1.lyan

References: Reference information is available for this article. Join IAEE, log in, or purchase the article to view reference data.

Published in Volume 37, China Special Issue of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.


© 2023 International Association for Energy Economics | Privacy Policy | Return Policy