When renewable energy technology products exports meet geopolitical risks: Can environmental policies sweeten the bitter pill of the trade?

Yanmin Shao and Junlong Li

Energy Economics, 2025, vol. 145, issue C

Abstract: Amid escalating global geopolitical risks (GPR) and intensifying energy transition competition, strategic rivalry in the energy sector has shifted from traditional resource contention to dominance over renewable energy technologies. While renewable energy technology products (RETP) are recognized as critical to global green transformation, the inhibitory effects of GPR on their international trade remain underexplored. This study addresses this gap by analyzing observations from 42 economies (1998–2020) using a gravity model. Our findings reveal a significant negative impact of GPR on RETP exports. Crucially, we identify conflicting fiscal policies: Environmental taxes exacerbate this negative effect by increasing compliance costs, whereas environmental expenditures mitigate it by reducing external costs. These results highlight the dual role of state intervention in energy technology wars, providing timely insights for policymakers navigating intertwined GPR and energy transition risks. Grounded in resource dependence theory, we propose a theoretical framework that leverages government intervention to help businesses reduce reliance on GPR. This framework repositions environmental policies as geopolitical hedging tools for RETP trade.

Keywords: Geopolitical risk; Renewable energy technology; Environmental tax; Environmental expenditure (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:145:y:2025:i:c:s0140988325003226

DOI: 10.1016/j.eneco.2025.108498

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