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What Drives States to Support Renewable Energy?

Steffen Jenner, Gabriel Chan, Rolf Frankenberger, and Mathias Gabel

Year: 2012
Volume: Volume 33
Number: Number 2
DOI: 10.5547/01956574.33.2.1
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Abstract:
Why do states support electricity generation from renewable energy sources? Lyon/ Yin (2010), Chandler (2009), and Huang et al. (2007) have answered this question for the adoption of renewable portfolio standards (RPS) at the U.S. state level. This article supplements their work by testing the core hypotheses on the EU27 sample between 1990 and 2010. Furthermore, the article asks why the majority of EU states relies on feed-in-tariffs (FIT). The study conducts logistic time series cross-section regression analyses that run on a hazard model. Evidence in support of private interest theory and public interest theory is provided. (a) The existence of a solar energy association increases the probability of a state to adopt regulation. (b) Solar radiation, and (c) the unemployment rate also increase the odds. (d) Electricity market concentration decreases the probability of transition. Keywords: Energy policy, Renewable energy, Electricity, Feed-in-tariff, Hazard model, Public Choice



Technology Diffusion and Environmental Regulation: The Adoption of Scrubbers by Coal-Fired Power Plants

Elaine F. Frey

Year: 2013
Volume: Volume 34
Number: Number 1
DOI: 10.5547/01956574.34.1.8
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Abstract:
Title IV of the 1990 Clean Air Act Amendments implemented a pollution permit system for sulfur dioxide (SO2) emissions that departs from state commandand-control regulations that were in place prior to and during its implementation. This paper develops a technology diffusion model, relying on rank effects or firm heterogeneity, to explain the adoption of scrubbers, a SO2 abatement technology. Using survival analysis, empirical results show that generating units regulated under Phase I of Title IV, units facing more stringent state regulations, and units with low expected installation costs are much more likely to install a scrubber. In addition, there is evidence of positive scale effects of adoption, meaning larger units are more likely to adopt because expected installation costs are lower. Tradable permit systems should give firms more flexibility in choosing abatement technologies, but results show that when command-and-control regulations overlap with a market-based system, the technology choice is restricted.





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