Energy policy of fossil fuel–producing countries: does global energy transition matter?

Abstract

The concept of energy transition can be interpreted in different ways depending on the nature of the agent involved. However, practitioners and existing literature agree that a country’s energy transition is the variation of fossil fuel share in the total primary energy supply (TPES). Public policies mostly focus on changing the energy mix directly or indirectly. However, the production of fossil fuels depends mostly on market-related determinants, including prices and investment in the means of production. But what is the contribution of global energy transition? The objective of this paper is to estimate to which extent public policies related to energy transition affect fossil fuel production in producing countries. For this purpose, we consider as a proxy of energy transition the evolution over 40 years of the TPES of a large panel of fossil fuel–exporting countries, which we compare to its total primary energy production (TPEP). Moreover, we analyze these effects to determine if they differ according to country characteristics, such as its level of development or its membership in OPEC. Finally, we describe the long-run and short-run effects by studying separately the effects of production investments and those of R&D investments in RES technologies.