Public budgets for energy RD&D and the effects on energy intensity and pollution levels

Balsalobre-Lorente, Daniel; Álvarez, Agustín; Cantos, José María

Public budgets for energy RD&D and the effects on energy intensity and pollution levels

2015

Balsalobre-Lorente, Daniel | Álvarez, Agustín | Cantos, José María

This study, based on the N-shaped cubic model of the environmental Kuznets curve, analyzes the evolution of per capita greenhouse gas emissions (GHGpc) using not just economic growth but also public budgets dedicated to energy-oriented research development and demonstration (RD&D) and energy intensity. The empirical evidence, obtained from an econometric model of fixed effects for 28 OECD countries during 1994–2010, suggests that energy innovations help reduce GHGpc levels and mitigate the negative impact of energy intensity on environmental quality. When countries develop active energy RD&D policies, they can reduce both the rates of energy intensity and the level of GHGpc emissions. This paper incorporates a moderating variable to the econometric model that emphasizes the effect that GDP has on energy intensity. It also adds a variable that reflects the difference between countries that have made a greater economic effort in energy RD&D, which in turn corrects the GHG emissions resulting from the energy intensity of each country.

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