Pollin, RobertGallego, Camilo A.2024-04-262024-04-262022-022022-0210.7275/26350575https://hdl.handle.net/20.500.14394/18798This dissertation contributes to the emerging literature on green industrial policies. Green industrial policies fill gaps left by classical industrial policies by simultaneously addressing environment and development concerns. I concentrate my analysis on the electricity industry in Colombia, as a case study for similar developing economies. I use macroeconomic analysis, industrial organization theory and applied micro-econometrics to present policy foundations of how economies derive economic benefits in a green energy transition. My first chapter contains analysis on the impact of green industrial policies for advancing viable environmental and development goals. To channel investments in clean energy, I provide the conditions in the design of long-term forward contracting as a mitigating strategy for Missing- Markets—a recurrent market failure in the electricity industry. Long-term forward contracting establishes a fixed price signal for electricity, providing stability as well as standards of fairness for investors, producers and consumers. This framework can expand employment opportunities in Colombia’s energy sector compared to a Business-as-Usual scenario. My second chapter quantifies how market power and uncompetitive behavior in forward markets affect equilibrium prices in the electricity industry. Rent-seeking behavior might impede employment creation from green energy investments. The literature on competition in wholesale electricity markets has largely overlooked the effect of forward contracts on market power. I show how the inclusion of price-endogenous forward contracts—observed contract terms that can be exploited in favor of participants with market power—can deteriorate competition. My empirical results indicate a significant positive relation between increases of electricity prices and market power in Colombia, which can be exacerbated during extreme weather conditions. I use a series of counterfactuals in an agent-based optimization model to verify my findings. Finally, this dissertation quantifies the impact on prices of increasing non-hydro renewables in the electricity industry. Intermittency of clean energy sources can be seen as an apparent obstacle in the reliable operation of electricity systems—one that could delay a clean energy transition. Using principal-agent and empirical models, I challenge this view showing that clean energy may in fact contribute to the reliability and stability in modern power systems.Industrial policyemployment creationmarket powerelectricity marketsrenewable energycontract theoryEconometricsEnvironmental StudiesGrowth and DevelopmentIndustrial OrganizationIndustrial TechnologyMacroeconomicsPolitical EconomyPower and EnergyCREATION OF ECONOMIC GROWTH AND COMPETITION THROUGH GREEN-INDUSTRIAL POLICIESDissertation (Campus Access - 5 Years)https://orcid.org/0000-0002-4415-7857