The Liberalization of the Internal Energy Market in the European Union: Evidence of Its Influence on Reducing Environmental Pollution

Pablo Ponce, Cristiana Oliveira, Viviana Álvarez and María de la Cruz del Río-Rama
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Cristiana Oliveira: European University of the Canary Islands, 38300 La Orotava, Santa Cruz de Tenerife, Spain
Viviana Álvarez: School of Economics, Universidad Nacional de Loja, 11050 Loja, Ecuador
María de la Cruz del Río-Rama: Business Management and Marketing Department, Faculty of Business Sciences and Tourism, University of Vigo, 32004 Ourense, Spain

Energies, 2020, vol. 13, issue 22, 1-17

Abstract: From an empirical point of view, the liberalization of the internal energy market reduces carbon dioxide emissions, promoting a wider range of renewable energy sources. The aim of this paper is to examine the effect of the liberalization of the internal energy market on CO 2 emissions, which was implemented in the European Union in 2011. The research data cover 27 countries of the European Union during the period 2004–2017 and was processed by estimating a two-way effects econometric model. The results suggest that the liberalization of the internal energy market is negatively related to CO 2 emissions; the policy was effective in reducing CO 2 emissions and, therefore, slowing down climate change. This result is significant at the level of the European Union, and in high-income countries since the year the policy was implemented, being different in the upper-middle-income countries, which begins to be effective after two years, which is due to the economic characteristics of the countries. The public policies to be implemented to reduce carbon dioxide emissions should focus on reducing the barriers imposed on foreign trade, which prevent efficient use of resources and providing financial and operating facilities to renewable energy providers in order to stimulate their production and consumption.

Keywords: CO 2 emissions; liberalization; natural gas; electricity; renewable energy (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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