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Does geopolitical uncertainty matter for the diffusion of clean energy?

Nidhaleddine Ben Cheikh and Younes Ben Zaied

Energy Economics, 2024, vol. 132, issue C

Abstract: This study revisits the determinants of renewable energy (RE) deployment, with an emphasis on the role of recent adverse geopolitical events. We implement a panel vector autoregressive model where different techniques and tools are available to trace the dynamic interdependence between RE and its main drivers. The impulse response analysis indicates that geopolitical uncertainty exerts a positive impact on the clean energy sector in advanced countries. However, geopolitical shocks do not appear to stimulate the transition toward alternative sources of energy in emerging and developing economies. The forecast-error variance decomposition confirms the importance of adverse geopolitical shocks in explaining the dissemination of renewables in advanced economies. Policymakers in less developed countries are urged to continue supporting RE initiatives and infrastructure, which are key to successful mitigation strategies.

Keywords: Renewable energy; Geopolitical risk; Growth; Panel VAR (search for similar items in EconPapers)
JEL-codes: C33 Q40 Q42 Q53 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:132:y:2024:i:c:s0140988324001610

DOI: 10.1016/j.eneco.2024.107453

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Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant

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