The role of environmental taxes and public policies in supporting RES investments in EU countries: Barriers and mimicking effects

Highlights: • Assessing the effectiveness of public policies for RES investments in EU countries. • A spatial model with a weighting matrix of energy trade linkages is used. • FIT proves to be effective on the deployment of renewable technologies. • Environmental tax burden represents a barrier for RES investments. • Trade flows provide a channel for sharing technological skills. This aim of the paper is to investigate on the strength of EU renewable energy policies and of internal barriers to energy investments. Using a novel approach based on spatial econometric methods, the paper contributes to the debate on the effectiveness of policies supporting renewable energy investments in the EU member states. The empirical analysis is based on estimates from spatial econometric models that combines independent variables with a weighting scheme of trade linkages between member states. It allows to show how trade relationships can play a role in shaping green energy policies. In fact, technological skills are transferred together with goods and services, trade flows represent an exogenous factor correlated with green investments.