A Free-Market Environmentalist Enquiry on Spain’s Energy Transition along with Its Recent Increasing Electricity Prices

William Hongsong Wang, Victor I. Espinosa and Jesús Huerta de Soto
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William Hongsong Wang: Instituto de Estudios Políticos y Relaciones Internacionales, Universidad Francisco Marroquín (Madrid Campus), Calle de Arturo Soria 245, 28033 Madrid, Spain
Victor I. Espinosa: Public Policy Observatory, Universidad Autónoma de Chile, Santiago 7500912, Chile
Jesús Huerta de Soto: Department of Applied Economics I, History and Economic Institutions and Moral Philosophy, Social and Legal Sciences Faculty, Rey Juan Carlos University, 28033 Madrid, Spain

IJERPH, 2022, vol. 19, issue 15, 1-34

Abstract: This paper analyzes the Spanish energy transition’s general situation and its increasing electricity prices in recent years from a free-market environmentalist (FME) approach. We hypothesize and argue that high taxes, high government subsidies, and government industrial access restrictions breach private property rights, hindering Spain’s renewable energy (RE) development. Our paper discovers that Spain’s state-interventionist policies have increased the cost of the energy and power industries, leading to electricity prices remaining relatively high before and after the outbreak of the COVID-19 pandemic. After reviewing the literature on the FME approach and Spain’s case, a Box–Jenkins (ARIMA) model is used to clarify the economic performance of the Spanish electricity industry with a proposal for forecasting electricity prices. It is observed that Spain fails the EU and its national goal of providing an affordable energy price as a part of the green energy transition. Finally, free-market environmental solutions and policy reforms are proposed to facilitate Spain’s energy transition.

Keywords: free-market environmentalism; renewable energy; entrepreneurship; public policy; Spain; EU Green Deal; energy transition; electricity prices; decision making; public choice (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2022
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