Democracies use more renewable energy

Abstract

In his groundbreaking study titled ‘Democracies Pay Higher Wages’, Rodrik emphasized that democracies provide higher wage levels. So, can democracies also be functional in solving other problems that benefit society? In recent years, the aggravation of the environmental crisis has made the use of renewable energy more important. Although there has been an increasing interest in the determinants of renewable energy, the theoretical connections and empirical evidence between democracy and renewable energy are almost nonexistent. With this motivation, this study examines the main determinants of renewable energy in the United States during 1970–2020, assigning a specific role to democracy. The main finding of the study indicates that democracy promotes the widespread use of renewable energy. Similarly, economic growth increases renewable energy. Otherwise, the effects of both CO2 emissions and trade openness on renewable energy are negative. Policymakers have the opportunity to improve both democracy and renewable energy.