Do we need disasters to adopt more environmental policies?

Abstract

Background: In this paper, we try to shed light on the question whether natural disasters, such as nuclear accidents, have an impact on policy makers' activity in passing new green energy policies. Disruptive moments like exogenous shocks reinforce society's disapproval against polluting technologies and should open a window of opportunities to eventually initiate a change toward green energy. Methods: Based on the data of 34 OECD countries, we disentangle the effect of disruptive exogenous shocks on countries' policy activity. Starting with OLS regressions, we run several robustness checks by using a pre-sample mean approach, an ARDL technique called dynamic heterogeneous panel models (DHPM), which allows for the distinction between long- and short-run effects. Results: The results corroborate the hypothesis that unexpected, disruptive events have a positive impact on the actual number of renewable energy policies. The fade-out time for shocks is about 7 years, leaving a positive long-term effect. Conclusion: Exogenous events such as nuclear disasters act as "focusing event" and seem to offer policy makers a window of opportunities to initiate conducive policy measures toward a cleaner economy. Furthermore, a country's capacity in green technologies is key to a pervasive diffusion of green technologies.