The Liberalization of the Internal Energy Market in the European Union: Evidence of Its Influence on Reducing Environmental Pollution

Abstract

From an empirical point of view, the liberalization of the internal energy market reduces carbon dioxide emissions, promoting a wider range of renewable energy sources. The aim of this paper is to examine the effect of the liberalization of the internal energy market on CO2 emissions, which was implemented in the European Union in 2011. The research data cover 27 countries of the European Union during the period 2004–2017 and was processed by estimating a two-way effects econometric model. The results suggest that the liberalization of the internal energy market is negatively related to CO2 emissions; the policy was effective in reducing CO2 emissions and, therefore, slowing down climate change. This result is significant at the level of the European Union, and in high-income countries since the year the policy was implemented, being different in the upper-middle-income countries, which begins to be effective after two years, which is due to the economic characteristics of the countries. The public policies to be implemented to reduce carbon dioxide emissions should focus on reducing the barriers imposed on foreign trade, which prevent efficient use of resources and providing financial and operating facilities to renewable energy providers in order to stimulate their production and consumption.

Dynamic spatial effects of determinants of foreign direct investment: A case of the southern key economic region of Vietnam

“…The results presented in Table 7 also show that the population growth of a province indirectly limits the potential FDI inflows of neighbouring provinces at a significant level of 1% and reduces the ability to attract potential FDI inflows in the whole region at the significance level of 1%. Thus, population growth and urbanisation are not only social phenomena that record the rate of urban population growth but also reflect the material change of the landscape (Ponce, Oliveira, Álvarez, & de la Cruz del Río‐Rama, 2020) along with the change of exploitation mode and use of resources. As a result, urbanisation made by population growth based on an unchanging economic structure combined with migratory flows that are mainly unskilled peasantry entering the informal sector creates the phenomenon of “false urbanisation” in urban areas (Peres et al, 2018).…”

Environmental regulation stringency and foreign direct investment

“…Once renewable energy consumption increases, a wide range of renewable energy sources is required to facilitate the liberalisation of the internal energy market. As such, Ponce, Oliveira, et al (2020) examine how the liberalisation of the internal energy market affects CO 2 emissions. The empirical results from their analysis imply that promoting the liberalisation of the internal energy market reduces CO 2 emissions.…”

Renewable energy and advanced logistical infrastructure: Carbon‐free economic development

“…Similarly, renewable energy also improves economic health in enhanced trade among pro‐environmentalist countries (Nassani et al, 2017). Literature also suggests that authorities use renewable energy and green products to improve environmental sustainability and economic growth (Abdullah et al, 2021; Ponce, Oliveira, et al, 2020; Rao & Holt, 2005). Khan, Yaseen, and Ali (2019) suggest that authorities should develop policies to minimize environmental adversities by adopting clean energy and logistics to further increase economic development.…”