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Oil rents, renewable energy and the role of financial development: Evidence from OPEC+ members

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  • Baudino, Marco

Abstract

This study examines the threshold and moderating effects of oil rents on renewable energy consumption in OPEC+ members for different financial development indicators. For this, dynamic panel threshold and GMM estimators are employed for the time period 1999-2019. The empirical findings of the analysis reveal significant and negative threshold and moderating effects for financial market and total financial development, but not for financial institution development. Specifically, oil rents are found to reduce renewable energy consumption, with this negative effect becoming more pronounced at higher levels of financial market and total financial development. Overall, the results do not support the energy transition theory for OPEC+ members for which revenues from oil rents are transferred toward renewable energy investments. Rather, the presence of lobbying influences and inadequate support from financial markets and institutions is validated. These findings provide an additional debating point on the role of oil endowments on sustainable growth.

Suggested Citation

  • Baudino, Marco, 2024. "Oil rents, renewable energy and the role of financial development: Evidence from OPEC+ members," Resources Policy, Elsevier, vol. 99(C).
    • Handle: RePEc:eee:jrpoli:v:99:y:2024:i:c:s0301420724007864
    DOI: 10.1016/j.resourpol.2024.105419
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    Keywords

    Oil rents; Renewable energy; Financial development; Panel threshold regression;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • P28 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Natural Resources; Environment
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation

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