Mechanisms for combating carbon emissions in the energy sector: a cross-country analysis
DOI:
https://doi.org/10.17308/econ.2025.4/13356Keywords:
carbon market, energy sector, renewable energy sources, applied econometrics, economic mechanismsAbstract
Subject. The behavior of the world's largest energy companies in the context of reducing CO2 emissions and transitioning to renewable energy sources.
Objective. To investigate the impact of macroeconomic factors and implemented environmental policy mechanisms on the behavior of major energy companies during the transition from coal, oil, and gas to renewable energy sources. To assess the accompanying reduction in carbon emissions.
Methodology. To test the hypotheses, we employed econometric data analysis using cross-sectional regression and fixed-effects regression models. We also used cluster to refine cross-country dependencies. Tax rates and permit prices were compared to the social cost of carbon.
Results. Based on a series of econometric models, we showed that emissions have a nonlinear relationship with economic growth. Both carbon taxes and emission trading systems prove effective for transitioning the energy sector to renewables. However, the analysis demonstrates that the simpler-to-implement carbon tax mechanism is significantly less effective than the emission trading system. This is particularly evident in recent data from highly developed countries and at the corporate level, primarily among companies from developed nations.
Conclusions. The results of the study are valuable to governments, energy companies, investors, environmental organizations, the academic community, and the general public, as they provide important information for decision-making in the field of sustainable development.
Downloads
References
Безруких, П. П. (2024). Доля энергоносителей в энергетике. Энергия: экономика, техника, экология, 472(4), 30-35. [Bezrukikh, P. P. (2024). Share of energy carriers in the energy sector. Energy: economics, technology, ecology, 472(4), 30-35. (In Russian).] DOI: 10.7868/S0233361924040049
Бессель, В. В., Кучеров, В. Г., Лопатин, А. С., & Мингалеева, Р. Д. (2022). Возобновляемая энергетика в системе мирового энергообеспечения. ESG-трансформация как вектор устойчивого развития. Москва: Аспект пресс. [Bessel, V. V., Kucherov, V. G., Lopatin, A. S., & Mingaleeva, R. D. (2022). Renewable energy in the global energy supply system. ESG transformation as a vector of sustainable development. Moscow: Aspect Press. (In Russian).]
Газман, В. Д. (2022). Экономическая оценка выбросов СО2 в экологическом разделе ESG. Экономический журнал Высшей школы экономики, 26(4), 579-597. [Gazman, V. D. (2022). Economic assessment of CO2 emissions in the environmental section of ESG. HSE Economic Journal, 26(4), 579-597. (In Russian).] DOI: 10.17323/1813-8691-2022-26-4-579-597
Газман, В. Д. (2022). Потенциал возобновляемой энергетики. М.: НИУ ВШЭ. [Gazman, V. D. (2022). The Potential of Renewable Energy. Moscow: HSE University. (In Russian).] DOI: 10.17323/978-5-7598-2573-9
Гоголева, Т. Н., Костылева, В. И., Канапухин, П. А., Никитина, Л. М., & Щепина, И. Н. (2024). Инструменты экологического регулирования и экономический рост. Вестник ВГУ: Экономика и управление, (1), 3-15. [Gogoleva, T. N., Kostyleva, V. I., Kanapukhin, P. A., Nikitina, L. M., & Shchepina, I. N. (2024). Environmental regulation tools and economic growth. Proceeding of Voronezh State University. Series: Economics and Management, (1), 3-15. (In Russian).] DOI: 10.17308/econ.2024.1/11831
Пахнин, М. А. (2020). Экономика изменения климата: Нобелевская премия 2018 г. Уильяма Нордхауса. Финансы и бизнес, 16(1), 5-22. [Pakhnin, M. A. (2020). The Economics of Climate Change: William Nordhaus’s 2018 Nobel Prize. Finance and Business, 16(1), 5–22. (In Russian).] DOI: 10.31085/1814-4802-2020-16-1-5-22
Степанов, И. А. (2019). Налоги в энергетике и их роль в сокращении выбросов парниковых газов. Экономический журнал Высшей школы экономики, 23(2), 290-313. [Stepanov, I. A. (2019). Taxes in the energy sector and their role in reducing greenhouse gas emissions. HSE Economic Journal, 23(2), 290–313. (In Russian).] DOI: 10.17323/1813-8691-2019-23-2-290-313
Abhayawansa, S., & Tyagi, S. (2021). Sustainable investing: The black box of environmental, social, and governance (ESG) ratings. The Journal of Wealth Management, 24(1), 49-54. DOI: 10.3905/jwm.2021.1.130
Bressler, R. (2021). The mortality cost of carbon. Nature Communications, 12(4467), 1-12.
Ekins, P., & Barker, T. (2001). Carbon taxes and carbon emissions trading. Journal of Economic Surveys, 15(3), 325-376.
Fischer, C., & Newell, R. (2005). Environmental and technology policies for climate change and renewable energy. Resources for the Future. Discussion Papers, 10789. DOI: 10.22004/ag.econ.10789
Kotsantonis, S., & Serafeim, G. (2019). Four things no one will tell you about ESG data. Journal of Applied Corporate Finance, 31(2), 50-58.
Loftus, P., Cohen, A., Long, J., & Jenkins, J. (2015). A critical review of global decarbonization scenarios: what do they tell us about feasibility? Climate Change, 6(1), 93-112.
Lu, J., & Li, H. (2024). The impact of ESG ratings on low carbon investment: Evidence from renewable energy companies. Renewable Energy, (223), 119984.
Nordhaus, W. (2017). Revisiting the social cost of carbon. Proceedings of the National Academy of Sciences, 114(7), 1518-1523.
Panwar, N., Kaushik, S., & Kothari, S. (2011). Role of renewable energy sources in environmental protection: A review. Renewable and Sustainable Energy Reviews, 15(3), 1513-1524.
Parry, I. (1998). Pollution regulation and the efficiency gains from technological innovation. Journal of Regulatory Economics, 14(3), 229-254.
Popp, D. (2006). R&D subsidies and climate policy: is there a «free lunch»? Climatic Change, 77(3), 311-341.
Popp, D., Newell, R., & Jaffe, A. (2010). Energy, the environment, and technological change. Handbook of the Economics of Innovation, (2), 873-937.
Wen, J. (2021). Does globalization matter for environmental degradation? Nexus among energy consumption, economic growth, and carbon dioxide emission. Energy policy, (153), 112230.
