{"title":"Greener horizons: Economic freedom as a catalyst for the global energy transition","authors":"Abebe Hailemariam , Kris Ivanovski","doi":"10.1016/j.erss.2025.104058","DOIUrl":null,"url":null,"abstract":"<div><div>Major advanced and emerging economies are setting targets to achieve an ambitious net zero emission target plan by 2050 to address climate change and ensure sustainable development. However, achieving this transition requires significant structural changes not only in energy mixes but also in the quality of economic and political institutions. In this paper, we investigate how economic freedom – as a key measure of institutional quality – influences the momentum of energy transition. To do so, we utilise panel data consisting of 35 advanced economies and 32 emerging and developing economies for the period from 2000 to 2020. Employing a series of panel data estimation techniques that address the common empirical issues, including endogeneity and heterogeneity, we find that countries with greater economic freedom tend to outperform in transitioning to a low-carbon economy. The findings suggest that promoting economic freedom is crucial as it allows policymakers to utilise incentive schemes based on market-based policies, including carbon pricing and R&D subsidies for renewable energy developments.</div></div>","PeriodicalId":48384,"journal":{"name":"Energy Research & Social Science","volume":"124 ","pages":"Article 104058"},"PeriodicalIF":6.9000,"publicationDate":"2025-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Energy Research & Social Science","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S2214629625001392","RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"ENVIRONMENTAL STUDIES","Score":null,"Total":0}
引用次数: 0
Abstract
Major advanced and emerging economies are setting targets to achieve an ambitious net zero emission target plan by 2050 to address climate change and ensure sustainable development. However, achieving this transition requires significant structural changes not only in energy mixes but also in the quality of economic and political institutions. In this paper, we investigate how economic freedom – as a key measure of institutional quality – influences the momentum of energy transition. To do so, we utilise panel data consisting of 35 advanced economies and 32 emerging and developing economies for the period from 2000 to 2020. Employing a series of panel data estimation techniques that address the common empirical issues, including endogeneity and heterogeneity, we find that countries with greater economic freedom tend to outperform in transitioning to a low-carbon economy. The findings suggest that promoting economic freedom is crucial as it allows policymakers to utilise incentive schemes based on market-based policies, including carbon pricing and R&D subsidies for renewable energy developments.
期刊介绍:
Energy Research & Social Science (ERSS) is a peer-reviewed international journal that publishes original research and review articles examining the relationship between energy systems and society. ERSS covers a range of topics revolving around the intersection of energy technologies, fuels, and resources on one side and social processes and influences - including communities of energy users, people affected by energy production, social institutions, customs, traditions, behaviors, and policies - on the other. Put another way, ERSS investigates the social system surrounding energy technology and hardware. ERSS is relevant for energy practitioners, researchers interested in the social aspects of energy production or use, and policymakers.
Energy Research & Social Science (ERSS) provides an interdisciplinary forum to discuss how social and technical issues related to energy production and consumption interact. Energy production, distribution, and consumption all have both technical and human components, and the latter involves the human causes and consequences of energy-related activities and processes as well as social structures that shape how people interact with energy systems. Energy analysis, therefore, needs to look beyond the dimensions of technology and economics to include these social and human elements.