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The political economy of renewable energy policies in Germany and the EU

Sebastian Strunz, Erik Gawel and Paul Lehmann

No 12/2015, UFZ Discussion Papers from Helmholtz Centre for Environmental Research (UFZ), Division of Social Sciences (ÖKUS)

Abstract: In this paper, we employ a public choice perspective to analyze the development of policies for renewable energy sources (RES) in the EU in general and in Germany more specifically. In doing so, we explain the main characteristics of current RES policies in the EU by reference to the selfinterest driven motivations of voters, stakeholders and political actors. One important puzzle, which we address, is the following: How could effective RES-policies be introduced against the political opposition of fossil-fuel interest groups in the past? Via analyzing the German example in more detail, we show how over time a self-reinforcing interplay of ideological and financial RES support has emerged. Moreover, we demonstrate that observed specific design choices for EU RES policies, such as largely riskless remuneration schemes, high degrees of technology differentiation and decentralized decision-making across Member States, can be traced back to politicians' need to balance a variety of partly opposing interests. A major benefit of the presented analysis is that it provides a realistic assessment of the challenges for RES policy reform - any reform effort critically depends on its ability to balance stakeholder interests.

Keywords: lobbying; public choice; renewable energy sources; subsidies; support policies (search for similar items in EconPapers)
JEL-codes: D72 D78 H25 K32 Q42 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-cdm, nep-ene, nep-eur, nep-pol and nep-reg
References: View references in EconPapers View complete reference list from CitEc
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Journal Article: The political economy of renewable energy policies in Germany and the EU (2016) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ufzdps:122015

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