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

Author

Listed:
  • Zhao, Zuoxiang
  • Gozgor, Giray
  • Lau, Marco Chi Keung
  • Mahalik, Mantu Kumar
  • Patel, Gupteswar
  • Khalfaoui, Rabeh

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.

Suggested Citation

  • Zhao, Zuoxiang & Gozgor, Giray & Lau, Marco Chi Keung & Mahalik, Mantu Kumar & Patel, Gupteswar & Khalfaoui, Rabeh, 2023. "The impact of geopolitical risks on renewable energy demand in OECD countries," Energy Economics, Elsevier, vol. 122(C).
    • Handle: RePEc:eee:eneeco:v:122:y:2023:i:c:s0140988323001986
    DOI: 10.1016/j.eneco.2023.106700
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    Cited by:

    1. Pan, Lijun & Wang, Yangjie & Sun, Xiaofei & Sadiq, Muhammad & Dagestani, Abd Alwahed, 2023. "Natural resources: A determining factor of geopolitical risk in Russia? Revisiting conflict-based perspective," Resources Policy, Elsevier, vol. 85(PA).
    2. Galina Chebotareva & Inna Čábelková & Wadim Strielkowski & Luboš Smutka & Anna Zielińska-Chmielewska & Stanislaw Bielski, 2023. "The Role of State in Managing the Wind Energy Projects: Risk Assessment and Justification of the Economic Efficiency," Energies, MDPI, vol. 16(12), pages 1-26, June.
    3. Trivedi, Jatin & Chakraborty, Dipanwita & Nobanee, Haitham, 2023. "Modelling the growth dynamics of sustainable renewable energy – Flourishing green financing," Energy Policy, Elsevier, vol. 183(C).
    4. Hille, Erik, 2023. "Europe's energy crisis: Are geopolitical risks in source countries of fossil fuels accelerating the transition to renewable energy?," Energy Economics, Elsevier, vol. 127(PA).

    More about this item

    Keywords

    Renewable energy demand; Climate change economics; Geopolitical risks; Natural resources rents; OECD member countries;
    All these keywords.

    JEL classification:

    • Q21 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Demand and Supply; Prices
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations

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