Essays on political economy of energy and environment.

In this PhD dissertation we gain insight into environmental policies and their enforcement, and the political process that leads to the in practice observed suboptimal policies. The area of interest is the European Union (EU) and the United States of America (USA). We apply a specific class of models that is ideally suited to study the impact of incentives and selection on environmental and energy policymaking: political agency models. At the heart of these models is the principal-agent relationship between the government/politicians (the agent) and the citizens/voters (the principals). In this relationship, an incentive problem arises as the citizens delegate authority to the policymakers who benefit from an informational advantage. We build on the concept of a government and politicians that are susceptible to influence. In the first two papers, we apply the common agency model of Dixit et al. (1997) to two different research questions. Common agency is a multilateral relationship in which several principals simultaneously try to influence the actions of an agent. Such situations occur frequently, particularly in the political processes that generate economic policies. In the first paper, we apply the common agency model to enforcement of environmental legislation in European countries. In practice we observe that both the inspection rate and the penalty level differ strongly among European countries for the same legislation. We study whether the differences in enforcement policies can be justified from an efficiency perspective, and if not, whether they favor the interests of certain lobby groups. We find that, despite the regulatory costs, green interest groups generally favor more stringent enforcement strategies with high fines and high inspection frequencies, while brown interest groups prefer laxer enforcement strategies. In the second paper, we apply the common agency model to the adoption of a Renewable Portfolio Standard (RPS) policy by states in the US, to better understand the impact of special industrial interests on policy decision-making. In the last two decades, many U.S. states introduced support policies to promote electricity generation from renewable energy sources. Renewable portfolio standards (RPS) are considered to be the key policy tool to date. An important question is why some state legislators were front-running the trend of RPS implementation while others adopted policies just recently, and again others have not adopted them so far. We theoretically prove that lobby efforts of conventional energy interests (CEI) have a negative, and those of renewable energy interests (REI) a positive, impact on the adoption of RPS. To confirm the hypotheses that come out of the theory, we compile data on financial contributions of both types of energy interests to US state-level policymakers between 1998 and 2010. We find that CEI have donated more to state-level legislators affiliated with the Republican Party than to Democrats while contributions from REI went largely to Democrats. Also, we reveal statistically significant links between the likelihood of RPS adoption and private interest contributions. Financial contributions from CEI have a negative effect on the likelihood of RPS adoption while REI contributions have a positive effect. And finally, the estimates show a similar, albeit less significant, pattern on RPS stringency.For the last two papers, we focus on elections as the core mechanism to solve monitoring and selection problems inherent to a principal-agent relationship in politics. In the third paper, we show how politicians, in a probabilistic electoral setting, set support for solar PV at a level that maximizes election chances instead of opting for the socially desirable level. In several EU countries we observe a strong discrimination in the renewable energy support in favor of particular technologies, mainly solar PV. We examine what drives the agencies or politicians to follow this strategy in promoting particular types of renewable energy. The aim of our model is to put forward an important explanation for discrimination in support for renewables from a political point of view. In the fourth paper, we study how politicians sometimes take protectionist measures in international trade of renewable energy, as a way to disguise transfers towards the domestic renewable industry. Harmonizing renewable energy support across the single European market rather than in protected national markets could reduce costs by as much as 10%. Up to now, there have been no serious attempts to move the different European national support systems more into a common direction. In this paper, we put forward a political explanation for these economic inefficiencies. Our hypothesis is that the national governments were influenced by a strong national industrial lobby that favored a domestic renewable production sector.status: publishe

De Turteltaks en het protectionistisch hernieuwbare energiebeleid in Vlaanderen

Hernieuwbare energie heeft niet gezorgd voor minder CO2-uitstoot in de Europese Unie. De meest efficiënte manier om een bepaald niveau hernieuwbare energie te bereiken is via internationale handel in groene energie. De veel grotere steun die zonnepanelen in Vlaanderen hebben ontvangen, is inefficiënt en kan enkel verklaard worden door politieke en electorale motieven. We moeten afstappen van het protectionistisch beleid voor groene energie.status: publishe

Diesel-gate... maar wat loopt er echt fout?

Er is geen goede reden geweest om het gebruik van dieselauto’s minder te belasten dan benzinewagens; nochtans gebeurt dat al meer dan 20 jaar. Er is ook geen goede reden om het gebruik van elektrische auto’s onbelast te laten; ze veroorzaken evengoed files en ongevallen als de andere auto’s. Lage emissiezones invoeren in de grote agglomeraties wordt moeilijk wanneer meer dan de helft van het wagenpark bestaat uit dieselauto’s. Het is tijd voor een cordontol of rekeningrijden rond de grote agglomeraties zodat files en vervuiling tezamen kunnen aangepakt worden.status: publishe

The impact of private interest contributions on RPS adoption

In the last two decades, many U.S. states introduced policies to promote electricity generation from renewable energy sources (RES-E). Renewable portfolio standards (RPS) are considered to be the key RES-E policy tool to date. This article tackles the question on why some state legislators were front-running the trend of RPS implementation whereas others adopted policies just recently, and why others have not adopted them at all. We compile data on financial contributions of conventional energy interest groups (CEI) and renewable energy interest groups (REI) to state-level policy-makers between 1998 and 2010. By means of hazard and tobit regressions, we test the effect of these financial contributions on the probability of RPS adoption and on RPS stringency. The article provides evidence in favor of interest group theory. First, CEI have donated more to state-level legislators affiliated with the Republican Party than to Democrats while contributions from REI went largely to the latter. Second, there are statistically significant links between the likelihood of RPS adoption and private interest contributions. Contributions from CEI have a negative effect on the likelihood of RPS adoption whereas REI contributions have a positive effect. © 2013 John Wiley & Sons Ltd.status: publishe