Geopolitical risk, financial development, and renewable energy consumption: empirical evidence from selected industrial economies

The rapid rise in climate and ecological challenges have allowed policymakers to introduce stringent environmental policies. In addition, financial limitations may pose challenges for countries looking to green energy investments as energy transition is associated with geopolitical risks that could...

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Published in:Environmental science and pollution research international 2024-03, Vol.31 (14), p.21935-21946
Main Authors: Ben Abdallah, Amal, Becha, Hamdi, Sharif, Arshian, Bashir, Muhammad Farhan
Format: Article
Language:English
Subjects:
Alternative energy
Aquatic Pollution
Atmospheric Protection/Air Quality Control/Air Pollution
Clean energy
climate
Earth and Environmental Science
econometrics
economic development
Ecotoxicology
energy
Energy consumption
Energy policy
Energy transition
Environment
Environmental Chemistry
Environmental Health
Environmental policy
environmental sustainability
Geopolitics
Green energy
Indicators
International relations
Investments
issues and policy
Political factors
Political risk
politics
Renewable energy
renewable energy sources
Renewable resources
Research Article
risk
Sustainable development
uncertainty
Waste Water Technology
Water Management
Water Pollution Control
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Summary:The rapid rise in climate and ecological challenges have allowed policymakers to introduce stringent environmental policies. In addition, financial limitations may pose challenges for countries looking to green energy investments as energy transition is associated with geopolitical risks that could create uncertainty and dissuade green energy investments. The current study uses PTR and PSTR as econometric strategy to investigate how geopolitical risks and financial development indicators influence energy transition in selected industrial economies. Our findings indicate a non-linear DCPB-RE relationship with a threshold equal to 39.361 in PTR model and 35.605 and 122.35 in PSTR model. Additionally, when the threshold was estimated above, financial development indicators and geopolitical risk positively impacts renewable energy. This confirms that these economies operate within a geopolitical context, with the objective of investing more in clean energy. We report novel policy suggestion to encourage policymakers promoting energy transition and advance the sustainable financing development and ecological sustainability.
ISSN:1614-7499
0944-1344
1614-7499
DOI:10.1007/s11356-024-32565-x