Finance for Renewable Energy: An Empirical Analysis of Developing and Transition Economies
AbstractThis paper examines the role of the financial sector in renewable energy (RE) development. Although RE can bring socio-economic and environ- mental benefits, its implementation faces a number of obstacles, especially in non-OECD countries. One of these obstacles is financing: underdevel- oped financial sectors are unable to efficiently channel loans to RE produc- ers. The influence of financial sector development on the use of renewable energy resources is confirmed in panel data estimations on up to 119 non- OECD countries for 1980-2006. Financial intermediation, in particular commercial banking, has a significant positive effect on the amount of RE produced, and the impact is especially large when we consider non- hydropower RE such as wind, solar, geothermal, and biomass. There is also evidence that the adoption of the Kyoto Protocol has had a significant positive impact on the development of the RE sector.
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Bibliographic InfoPaper provided by CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich in its series CER-ETH Economics working paper series with number 09/117.
Length: 37 pages
Date of creation: Aug 2009
Date of revision:
renewable energy; financial sector; banking; development;
Other versions of this item:
- Brunnschweiler, Christa N., 2010. "Finance for renewable energy: an empirical analysis of developing and transition economies," Environment and Development Economics, Cambridge University Press, vol. 15(03), pages 241-274, June.
- O13 - Economic Development, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
- O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
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