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Policies targeting energy efficiency and renewable energy are sometimes viewed as more politically feasible than carbon pricing in pursuit of emission reduction goals. This paper assesses underlying drivers of energy policy development. These factors include economic, social, environmental, and institutional variables. The between estimator for panel data is an appropriate method for our focus on some exogenous variables that vary more across countries than over time. We find that larger oil reserves per capita have a negative relationship with renewable energy policy development. Education and political globalisation have strong positive relationships with both energy-efficiency and renewable-energy policy development. These results suggest that greater participation in global political groups can be an indirect approach toward energy policy development, in cases where direct and immediate policies are hard to implement. OECD countries have higher policy scores by 33 and 25 points in energy efficiency and renewable energy respectively. Blinder-Oaxaca decomposition analysis shows that these higher scores are primarily due to social and political institution predictors rather than economics and physical endowments. • Large-n cross country international sample on continuous policy score measurement. • Political globalisation is positively linked with renewables and energy efficiency policies. • Education is positively linked to energy policy development, especially for efficiency. • Higher OECD countries' policy scores are primarily due to social and political predictors. • Higher incomes are unlikely to lead to automatic improvements in energy policies. [ABSTRACT FROM AUTHOR]

The mitigation of climate change is the main issue for environmental policymakers. A large number of authors analysed the impact of various factors on greenhouse gas (GHG) emissions. In this paper, we proposed a multiplicative approach to use 2- and 3-way interactions simultaneously in order to analyse the effects of energy efficiency, renewable energy and sector mix as the moderators that shape the economic activity – environmental degradation nexus. The results encompassing global panel data show that the turning point increased from 1990 to 1995 to 2002–2007 and decreased afterwards. Considering the analysis of moderators, a high share of agriculture and industry sectors make the curve flat with a positive slope and a high level of economic activity was associated with more GHG emissions with no turning point. The marginal effect of energy efficiency to reduce the negative impact of agriculture and industry sectors was growing. Meanwhile, the marginal effect of renewables to reduce the negative impact of agriculture and industry sectors was diminishing. Service sector and energy efficiency, service sector and renewables worked as the substituting forces reducing GHG emissions with a diminishing marginal rate of substitution. Therefore, this study confirms that the economic activity – environmental degradation relationship is very complex and further studies should consider the role of the moderators of this nexus. [Display omitted] • Technique, composition effects should be considered as moderators of HGH emissions. • The multiplicative approach was applied to model interactions of GHG factors. • Agriculture, industry sectors made the economic activity GHG emissions curve flat. • Marginal effect of renewables to reduce GHG emissions was diminishing. • Service sector and renewables worked as substituting forces reducing emissions. [ABSTRACT FROM AUTHOR]