The renewable energy curse – does corruption turn clean energy into dirty? @GarethMP

Massimo Tavoni and Caterina Gennaioli published a nice paper showing that corruption and violence was higher in the high wind provinces of Italy after the installation of wind generators. They built on earlier work about countries with abundant renewable resources and weak institutions. The main question in their paper

… is whether an increase in the expected returns of investments in wind energy, following the introduction of the new policy regime based on a green certificate system, has driven economic agents, namely bureaucrats and entrepreneurs, to engage more in rent seeking activities.

As they studied Italy, there is no surprise about the answer which was yes. High winds ensure high returns of the wind farm investment, but whether this translates into more bribery depends on institutional quality. There was more corruption, and so especially in high-wind provinces of Italy.

image

Source: Green policy and corruption | VOX, CEPR’s Policy Portal.

The construction of an average wind park is associated with an increase of criminal association activity of 6%. Italy will have more corruption than elsewhere in the old European Union.

The wider problem is renewable energy is a celebrity technology. In the context of expressive politics, so many cheer for solar and wind power that standards drop in terms of who qualifies for subsidies and who should lose support when their investments do not turn out as promised.

https://twitter.com/CountCarbon/status/715136022414299138

Wind power is not new, it is intermittent, is unsuitable for modern work, and is land constrained but it is still subsidised. Green rent seeking is a real risk even in countries with the best political institutions.

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