Competition policies and environmental quality: Empirical analysis of the electricity sector in OECD countries

Over the last decades, electricity markets across OECD countries have been subjected to profound structural changes with far-reaching implications on the economy and the environment. This paper investigates the effect of restructuring - changes in entry regulations, the degree of vertical integration and ownership structure - on GHG emissions. The findings show that competition policies - particularly reducing the degree of vertical integration and increasing privatization - correlate negatively with emission intensity. However, the environmental effect of reducing market entry barriers is generally insignificant. Integration of competition and stringent environmental policies are required to reduce GHG emissions and improve environmental quality.