The Spread of Feed-In Tariff Legislation in Europe: A Diffusion of Innovation Study

Abstract

Environmental policy has become increasingly important as states attempt to curb negative environmental impacts and adopt a more a sustainable economic approach that relies on alternative energies instead of fossil fuels. Many countries have adopted policies to foster the production of renewable energy, chief among them feed-in tariffs (FiT) and renewable portfolio standards (RPS). Extensive study as to the pros and cons of both of these approaches has been done using a multitude of methodologies, but little research exists that examines why states choose one approach over the other. This paper seeks to address this gap in the existing research by exploring the following question: why have some European states adopted FiT legislation and others not? I test the primary model for state policy adoption - the integrated diffusion of innovation (DOI) model - in order to determine the extent to which this theoretical approach applies in an EU context. I use event history analysis to examine FiT legislation adoption in order to identify patterns and traits of those most likely to employ FiT. Using existing DOI literature as a guide, I test several internal determinants - problem severity, energy dependency, wealth, ideology, and interest group pressure - as well as spatial diffusion to understand the determinants of FiT legislation adoption. My results suggest that regional effects strongly influence FiT diffusion in Europe, while internal determinants are less likely to predict policy-making. To conclude, I offer suggestions for future research in this area.