Intra-firm Diffusion of Green Energy Technologies and the Choice of Policy Instruments

Environmental benefits only unfold if green (environmentally friendly) technologies are widely diffused and intensively deployed within a firm. We investigate how different types of policies - directly and in combination - affect the number of different green energy technologies adopted by a single firm (intra-firm diffusion). Using data from a dedicated survey on the diffusion of green energy technologies of 1200 Swiss firms and applying well-identified econometric models, we found that energy taxes are a very effective policy instrument for the intra-firm diffusion of green energy technologies. Even more important, however, are non-political measures that show the largest effect among all tested instruments. Additional analyses show that (a) time-consistency in policy making is more important for energy tax regimes than for regulations and (b) no evidence for complementarities between the policy types could be identified.