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Green investment: Trends and determinants

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  • Eyraud, Luc
  • Clements, Benedict
  • Wane, Abdoul
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    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.

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    Bibliographic Info

    Article provided by Elsevier in its journal Energy Policy.

    Volume (Year): 60 (2013)
    Issue (Month): C ()
    Pages: 852-865

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    Handle: RePEc:eee:enepol:v:60:y:2013:i:c:p:852-865

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    Web page: http://www.elsevier.com/locate/enpol

    Related research

    Keywords: Renewable resources and conservation; Energy; Environmental economics;

    References

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    Cited by:
    1. Heshmati, Almas, 2014. "An Empirical Survey of the Ramifications of a Green Economy," IZA Discussion Papers 8078, Institute for the Study of Labor (IZA).

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