Research Database

This study examines whether policies to promote renewable electricity generation are likely to be effective by applying panel unit root and stationarity tests to time series data on renewable electricity generation for 115 countries over the period 1980-2008. We find that for the panel as a whole, and almost three quarters of the individual countries, renewable electricity generation is characterized by a unit root. This result implies that policies to promote renewable electricity generation, such as renewable portfolio standards, which result in annual increases in renewable energy and, as such, which represent permanent positive shocks to the long-run growth path of renewable electricity generation, will be more effective in increasing renewable electricity generation than policies with a pre-specified time horizon.