Public and fiscal policy instruments for supporting renewable electricity development: Evidence from a cross-country study

Type of the article: Research Article AbstractAs governments worldwide intensify efforts to achieve decarbonization, the role of fiscal and public policy instruments in shaping energy transitions has gained critical importance. This study evaluates how budgetary measures, taxation schemes, subsidies, and regulatory standards influence renewable electricity outcomes, thereby linking climate policy design with broader public and municipal finance issues. The analysis relies on panel data from 48 OECD, OECD negotiating members, and OECD participating partner-countries between 2009 and 2022, estimated with fixed and random effects models in R Studio and tested for robustness using Driscoll-Kraay and cluster-robust standard errors. The findings indicate that, compared with other instruments, feed-in tariffs (β = 0.116, p < 0.001), planning for renewables expansion (β = 0.070, p < 0.01), and air emission standards (β = 0.170, p < 0.001) provide the strongest and most consistent support for renewable electricity development. Renewable energy certificates and auctions also contribute positively, though with weaker statistical significance, while fossil fuel excise taxes and coal bans display mixed or context-dependent effects. The adjusted R² of 0.38 for renewable electricity generation and 0.44 for renewable electricity supply demonstrates the explanatory relevance of the selected policy variables. Robustness checks further confirm the enduring importance of feed-in tariffs as a cornerstone of fiscal support for renewables. Finally, cross-country heterogeneity is evident, with strong positive random effects in Bulgaria (0.86), Slovenia (0.73), and Czechia (0.81), and pronounced negative effects in Saudi Arabia (–1.23), Costa Rica (–1.22), and Chile (–0.95). AcknowledgmentThis study was prepared as part of the project 101127491-EnergyS4UA-ERASMUS-JMO2023-HEI-TCH-RSCH and as part of the project “From Dependency to Resilience: Renewable Energy Transformation in Post-Soviet States – A Multi-Level Analysis of Key Drivers of Success” within the Philipp Schwartz Initiative, funded by the Alexander von Humboldt Foundation. However, views and opinions expressed are those of the author(s) only and do not necessarily reflect those of the European Union or European Education and Culture Executive Agency. Neither the European Union nor the granting authority can be held responsible for them. The authors are thankful to the Silesian University of Technology and the National Scholarship Programme of the Slovak Republic for their support in carrying out this research.