The impact of geopolitical risks on renewable energy demand in OECD countries

Zuoxiang Zhao (), Giray Gözgör, Marco Chi Keung Lau, Mantu Kumar Mahalik, Gupteswar Patel and Rabeh Khalfaoui

Energy Economics, 2023, vol. 122, issue C

Abstract: This paper examines the effects of geopolitical risks on renewable energy demand in 20 Organization for Economic Co-operation and Development (OECD) member countries from 1970 to 2019. The renewable energy demand function includes carbon dioxide (CO2) emissions, economic globalisation, natural resources rents, and per capita income as control variables. It is found that geopolitical risks reduce the demand for renewable energy and threaten climate change mitigation policies. Degrading the environment in terms of rising CO2 emissions is detrimental to the renewable energy demand. Natural resource rents also decrease renewable energy consumption. However, higher per capita income and economic globalisation significantly increase renewable energy consumption. These findings bear crucial policy implications for the Russia-Ukraine War era, suggesting that geopolitical risks discourage renewable energy demand. Therefore, policymakers in the OECD countries should focus on geopolitical harmony among economic agents, groups, and regions.

Keywords: Renewable energy demand; Climate change economics; Geopolitical risks; Natural resources rents; OECD member countries (search for similar items in EconPapers)
JEL-codes: F51 F53 O13 Q21 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (38)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:122:y:2023:i:c:s0140988323001986

DOI: 10.1016/j.eneco.2023.106700

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