Do sustainable energy policies matter for reducing air pollution?

Yes, they matter. To reply to this question, we assess the impact of energy efficiency and renewable energy policies on six different air pollutants: carbon dioxide (CO2), methane (CH4), nitrous oxides (N2O), nonmethane volatile organic compounds (NMVOCs), nitrogen oxides (NO) and sulfur dioxide (SO2) in Italian provinces in the decade 2005–2015. The empirical analysis is performed in a panel data context by means of propensity score matching with multiple treatments, since our framework is characterized by the presence of two treatments, corresponding to the two different energy policies analyzed, i.e. energy efficiency policy and renewable policy. These two policies can be applied by each province as mutually exclusive strategies or as joint strategies. Our results show that renewable policies are the most effective in terms of climate goals especially when implemented on a local scale, while energy efficiency policies alone are ineffective. Moreover, the success of these policies depends on the type of pollutant to be reduced. Finally, we note that the effect of energy policies was reinforced by the counter-cyclical fiscal policies implemented to counter the Global Financial Crisis in 2008.