Econometric analyses of renewable energy promotion

This thesis consists of four self-contained papers related to renewable energy promotion. Paper I analyzes the factors that influence the share of renewable energy in total energy supply. The analysis is conducted using a panel data consisting of 26 OECD countries over the period 1990-2010. The results from the two-way fixed effect model indicate that policy measures play important roles in increasing the share of renewable energy. A positive effect of Research and Development (R&D) on the share of renewable energy is found, and this is because R&D activities have reduced the cost of renewable energy production. The results also indicate that having a market-based policy instrument (feed-in tariffs or quota obligations) in place increases the share of renewable energy in a country. However, there is no evidence to prefer a feed-in tariff or a quota obligation in this study. The individual effect of these policy instruments is not significant. This may issue from lack of powerful variables to measure their magnitudes. In addition, a large energy consumption growth decreases the share of renewable energy in total energy supply. Paper II elicits the value of renewable electricity that people are willing to pay to have their electricity supply come from exclusively renewable sources in six OECD countries. The results indicate that people are willing to pay only a few percentage points more of their current electricity bill in each country. This suggests that it is still difficult to extract a sizable premium for renewable electricity. Paper III investigates motivations for adoption of renewable electricity among households in Sweden. Different models are used to consider the possible interactions between adopting renewable electricity and joining environmental organizations. The results indicate that people's residences and most socio-demographic characteristics do not affect their adoption of renewable electricity. Adopters of renewable electricity tend to be males, members of environmental organizations, and those who strongly agree that people should pay for environmental policies. Environmental concern also affects adoption of renewable electricity, mainly via membership in an environmental organization. Paper IV investigates determinants of people's participation in environmental organizations in Sweden with a zero-inflated ordered probit (ZIOP) model. This model can account for different types of non-members, i.e. those who might become members in the future and those who are unlikely to become a member. The differentiation is based on a two-stage decision on participation. Results indicate that different factors influence people’s decision in the two stages, and a factor could have different effect in the two stages. Attitudes towards the environment play an important role. The component of non-members varies among households of different income levels