Determinants of Trade with Solar Energy Technology Components: Evidence on the Porter Hypothesis?

Studies analyzing renewable energy market development usually investigate additional capacity or investment. Characteristics, roles and determinants of cross border trade with renewable energy system components remain blurred. Environmental regulation and renewable energy policies are important in promoting renewable energy use. Yet, the effect of respective policies on determining exports remains ambiguous. The Porter hypothesis and the lead market literature argue that environmental regulation leads to a comparative export advantage. Empirical studies testing both hypotheses reach diverging conclusions and rarely focus on the renewable energy sector. Using solar energy technology components, this study adds to the literature by explaining exports of environmental technologies. The analysis uses a gravity trade model and a unique panel dataset to test the role of renewable energy policies on environmental technology exports from OECD countries and to describe structure and development of international solar energy technology component trade. The results find a rapidly growing market with trade dominated by European countries. The study supports the Porter and the lead market hypotheses as early adopters of strong renewable energy policies have gained a comparative advantage. Analyzing the importer side, the study suggests that regulatory policies and import tariffs determine export flows of solar energy technology components.Solar Energy Technologies, Energy Policy, Environmental Regulation and Trade, Trade Barriers

Assessing the Strength and Effectiveness of Renewable Electricity Feed-in Tariffs in European Union Countries

In the last two decades, feed-in tariffs (FIT) and renewable portfolio standards (RPS) have emerged as two of the most popular policies for supporting renewable electricity (RES-E) generation in the developed world. A few studies have assessed their effectiveness, but most do not account for policy design features and market characteristics that influence policy strength. In this paper, we employ 1992-2008 panel data to conduct the first analysis of the effectiveness of FIT policies in promoting solar photovoltaic (PV) and onshore wind power development in 26 European Union countries. We develop a new indicator for FIT strength that captures variability in tariff size, contract duration, digression rate, electricity price, and electricity generation cost to estimate the resulting return on investment. We then regress this indicator on added RES-E capacity using a fixed effects specification. We find that FIT policies have driven solar PV and onshore wind capacity development in the EU. However, this effect is overstated without controls for country characteristics and may be concealed without accounting for the unique design of each policy. We provide empirical evidence that the interaction of policy design and market dynamics are more important determinants of RES-E development than policy enactment alone.Renewable energy, Feed-in tariff, Panel data models

Ausbau und internationaler Handel erneuerbarer Energien: Eine empirische Untersuchung der Wirkung von Politik, Märkten und Innovation

Der Ausbau erneuerbarer Energien spielt eine zentrale Rolle bei der Eindämmung des Klimawandels und kann gleichzeitig ein Element für nachhaltige wirtschaftliche Entwicklung sein. Staatliche Maßnahmen zur Förderung erneuerbarer Energien haben in einigen Ländern zu einer Veränderung der Strommärkte durch zunehmende Stromerzeugung aus erneuerbaren Energiequellen geführt. Bisher fehlen empirische Untersuchungen darüber, weshalb staatliche Eingriffe und Fördermaßnahmen in einigen Ländern erfolgreicher waren als in anderen. Im Ländervergleich ist die Wirkung von Förderprogrammen für erneuerbare Energien daher oft unklar. Neben der Veränderung nationaler Strommärkte hat der Ausbau erneuerbarer Energien zur Entwicklung eines Industriezweigs geführt, der die notwendigen Technologiekomponenten erzeugt. Während einige Länder diese Güter sehr erfolgreich produzieren und exportieren gibt es eine Debatte darüber, welchen Einfluss umweltpolitische Regulierung auf die Wettbewerbsfähigkeit der Fertigungsindustrie in einzelnen Ländern hat. Trotz der steigenden Bedeutung von erneuerbaren Energien bleiben Struktur und Ursachen des internationalen Handels mit entsprechenden Technologiegütern bisher unklar. Diese Dissertation befasst sich mit einer Reihe von Fragen in Bezug auf die Wirkung von Politikmaßnahmen zur Förderung erneuerbarer Energien. Im Fokus stehen insbesondere die Auswirkungen von Fördermaßnahmen auf den Ausbau der Erzeugungskapazität auf nationalen Märkten, sowie auf den internationalen Handel mit entsprechenden Technologiekomponenten. Mikro-ökonometrische Ansätze werden genutzt, um die Wirksamkeit von Einspeisetarifen und Renewable Portfolio Standards auf Kapazitäts- und Erzeugungsentwicklung in EU-Ländern und US-Bundesstaaten zu schätzen. Dabei werden länderspezifische Unterschiede der politischen Stringenz, Politikgestaltung und die Wirkung zusätzlicher Politiken besonders berücksichtigt. Darüber hinaus wird der internationale Handel mit Solar- und Windenergiekomponenten betrachtet. Durch eine Analyse der Exporte von OECD Ländern und China wird die Wirkung der Politik für erneuerbare Energien auf Wettbewerbsfähigkeit und damit den bilateralen Handel identifiziert. Methodisch trägt diese Dissertation zur Diskussion über die Rolle von länderspezifischen Effekten in der angewandten mikro-ökonometrischen Literatur und zur Identifizierung korrekter Schätzer unter Berücksichtigung von Null-Beobachtungen und Heteroskedastizität bei.Renewable energies are a critical element in containing climate change while sustaining economic development. The expanded introduction of renewable energy policies changed electricity markets due to increasing renewable electricity capacity and generation. Although some are convinced that policies have worked in selected markets, conclusive evidence on the effect of renewable energy policies remains unclear and is still debated. In addition, the change in national electricity systems is accompanied by the development of a dynamic industry sector providing the necessary technology components for renewable electricity production. While some countries are particularly successful in exporting renewable energy technology components, there is debate on the effect of environmental regulation on a country’s manufacturing industry competitiveness. Furthermore, in this particular sector, structure and drivers of international trade remain unclear. This dissertation addresses a number of questions regarding the effect of renewable energy policies on renewable electricity supply expansion and international trade in necessary technology components. An econometric approach is taken to estimate the effectiveness of renewable energy policies on renewable energy capacity and generation development in EU countries and U.S. states. Feed-in tariffs and renewable portfolio standards are analyzed while controlling for country differences in policy stringency, policy design and supplementary policies. Analyzing OECD country and Chinese exports of solar and wind energy technology components the effect of renewable energy policy on determining country competitiveness and, thus, bilateral trade is identified. Methodologically, this dissertation contributes to the discussion on the role of country specific effects in applied micro-econometric cross country comparison as well as to the selection of proper estimators under the existence of zero trade flows

Impact of renewable energy policy and use on innovation. A literature review

Technological changes in renewable energy technologies play an important role in the context of climate change as they contribute to a reduction of technology costs and lead to an increasing market penetration of emission reducing technologies. This paper provides a comprehensive literature review highlighting numerous motivations and necessities underlying the introduction of renewable energy policies. Starting with a brief overview on the induced innovation hypothesis, we show that policy intervention has been an effective tool to change relative prices, thus, incentivizing innovation, but that also various influencing factors are at play. We show that the literature agrees on the need for specific renewable energy policies in order to overcome concomitant market failures and barrier. We highlight that technology specific policies are generally understood as necessary complements to environmental non-technology specific policies in order to generate adequate demand in energy markets. However, in that respect, we outline the ongoing debate on the effectiveness of different technology specific policies on the demand-pull side and the role of technology-push policies. Additionally we provide a summary on methodological approaches to measure policy efforts and technological change respecting different impact levels and stages within the technological change process. Finally, by focusing on international competitiveness and technology cost we highlight two aspects of the effects renewable technology innovation and respective policy support