The Role of Industrial Policy in the Renewable Energy Sector

Todd Gerarden, Mar Reguant and Yi Xu

No 34079, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Renewable electricity generation technology costs have fallen dramatically, investment has grown rapidly, and renewables are now a pillar of climate and decarbonization policy. Part of the credit for these trends goes to environmental policy efforts to support renewable energy as a substitute to fossil energy. The recent rise in protectionism, industrial policy, and geopolitical tensions has the potential to either undermine or enhance these environmental policy objectives. In this paper, we provide an overview of renewable energy economics and policy, with a focus on solar and wind power. We outline theoretical rationales for industrial policy and review recent empirical research, paying particular attention to how renewable energy policies have generated spillovers across firms and countries. We close by highlighting how this recent evidence can inform ongoing industrial policy debates.

JEL-codes: L52 Q42 (search for similar items in EconPapers)
Date: 2025-07
New Economics Papers: this item is included in nep-ene and nep-env
Note: EEE
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Forthcoming: The Role of Industrial Policy in the Renewable Energy Sector , Todd Gerarden, Mar Reguant, Daniel Yi Xu. in Environmental and Energy Policy and the Economy, volume 7 , Kotchen, Deryugina, and Wolfram. 2025

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