Green investment: Trends and determinants

Luc Eyraud, Benedict Clements and Abdoul Wane

Energy Policy, 2013, vol. 60, issue C, 852-865

Abstract: This paper fills a gap in the macroeconomic literature on renewable sources of energy. It offers a definition of green investment and analyzes the trends and determinants of this investment over the last decade for 35 advanced and emerging countries. We use a new multi-country historical dataset and find that green investment has become a key driver of the energy sector and that its rapid growth is now mostly driven by China. Our econometric results suggest that green investment is boosted by economic growth, a sound financial system conducive to low interest rates, and high fuel prices. We also find that some policy interventions, such as the introduction of carbon pricing schemes or “feed-in-tariffs,” which require use of “green” energy, have a positive and significant impact on green investment. Other interventions, such as biofuel support, do not appear to be associated with higher green investment.

Keywords: Renewable resources and conservation; Energy; Environmental economics (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (106)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:60:y:2013:i:c:p:852-865

DOI: 10.1016/j.enpol.2013.04.039

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