Academic and policy discussions increasingly recognise the wider impacts of energy policy on the macro-economy. For example, recent analyses on energy efficiency policies emphasise the stimulus to economic activity that these typically generate and their potential impacts on distributional issues, while policies aimed at growing the offshore wind sector have associated targets for the economic impacts that could be secured.
However, interaction in the opposite direction, that is the impact of economic policies on the energy system, has been comparatively neglected and, in particular, there has been little system-wide analysis of the spill-over effects from economic policies to the energy system.
The studies that have looked at the impact of economic policies on the energy system have tended to focus upon specific policies that have a high correlation with energy and/or environmental outcomes – for example, the recent debate here in Scotland with regard to Air Departure Tax.
But what about economic policies more broadly? Continue reading