Sustainable energy consumption and finance in the presence of risks: Towards a green economy

George Hondroyiannis, Evangelia Papapetrou and Pinelopi Tsalaporta

Renewable Energy, 2024, vol. 237, issue PA

Abstract: Moving towards a green economy, sustainable energy consumption and financial development amid mounting risks moved to center stage of policymaking and academia. Strengthening energy consumption from renewable sources is integral to the attainment of the overarching sustainable development goals of the Paris Agreement. The study employs data from 19 OECD economies spanning from 1990 to 2020 to explore the effect of risks on sustainable energy consumption. Using a multifaceted empirical approach -- comprising Panel OLS, MG estimators, quantile regression analysis and local projection approach -- results establish a key role for political, economic and financial risks in determining energy consumption from renewable sources. Results for the impact of finance indicators on sustainable energy consumption provide robust, though mixed, findings on how to bridge the climate financing gap. Our findings underscore the significant positive influence of human capital development, economic growth, economic openness and oil prices on sustainable energy use. It is further shown that decreasing carbon emissions and making sustainable energy more affordable should be on the central agenda of policymaking for promoting environmental sustainability. A multi-lever strategy is needed when making environmental policies while distributional heterogeneity should also be considered.

Keywords: Economic and financial risks; Sustainable energy consumption; Panel model estimation; Local projection approach (search for similar items in EconPapers)
JEL-codes: C33 D81 F64 J24 O50 Q43 Q56 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:renene:v:237:y:2024:i:pa:s0960148124016331

DOI: 10.1016/j.renene.2024.121565

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