Energy market liberalisation and renewable energy policies in OECD countries

We analyse the impact of market liberalisation on renewable energy policies in OECD countries. To this end, we first develop an aggregated indicator of renewable energy policies using principal components analysis and then examine its determinants through panel datatechniques. Our resultsare consistent with the predictions of political-economy models of environmental policies, as brown lobbying, proxied by entry barriers in the energy sector, and citizens’ preferenceshave the expected effectson policy. Brown lobbying has a negative effect on the policy indicator, evenwhen accounting for endogeneity in its effects in a dynamic panel specification and using different policy indicators. Reducing income inequality, the ratification of the Kyoto protocol and stronger green parties all positively affect the approval of more ambitious policies but with less robust results.