Restructuring Reforms for Green Growth
IMF Working Papers, June 9, 2023
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Bibliographic details
- Authors: Serhan Cevik, João Tovar Jalles
- Published: June 9, 2023
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798400244667.001
Summary
- Purpose: Examines the impact of structural reforms in the energy sector (electricity and gas) on environmental outcomes and green growth indicators.
- Sample and period: Panel of 25 advanced economies during the period 1970-2020.
- Core conclusion: Structural reforms should be designed not just for market efficiency but also for green growth.
Key findings
- Emissions:
- Structural reforms so far failed in reducing greenhouse gas emissions per capita.
- There is some evidence for greater effectiveness in lowering emissions per unit of GDP.
- Renewable energy supply:
- Energy reforms are not associated with higher supply of renewable energy as a share of total energy supply.
- Innovation:
- Energy reforms appear to stimulate a sustained increase in environmental inventions and patents per capita over the medium term.
- Nonlinear effects:
- Strong evidence that market-friendly energy reforms lead to better environmental outcomes and green growth in countries with stronger environmental regulations.
Policy implications and recommendations
- Design reforms to target both market efficiency and green growth objectives.
- Complement market-friendly energy reforms with stronger environmental regulations to achieve better environmental outcomes and stimulate green innovation.
Methodology and scope notes
- Sector focus: Electricity and gas.
- Outcome measures: Greenhouse gas emissions per capita; emissions per unit of GDP; renewable energy share of total energy supply; environmental inventions and patents per capita.
- Analytical approach: Panel analysis of reform impacts in 25 advanced economies covering 1970-2020.
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