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Nexus between energy efficiency finance and renewable energy development: Empirical evidence from G-7 economies

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  • Fan, Qiuyan
  • Hajiyeva, Aytan Merdan

Abstract

Renewable energy (RE) and energy efficiency (EE) have become hot topics among academic and business players in recent history in relation to the question of sustainable growth. Considering this backdrop, this research evaluates the EE of RE and the influence of RE on energy potential risk from both static and dynamic viewpoints in G-7 nations from 2005 to 2019. To quantify EE, a GVAR is utilized. Our results show no substantial impact on energy security risk from wind, hydropower, or total RE sources based on the Augmented Mean Group (AMG) projections for G-7 nations. Fuel and hydropower have a unidirectional causality to energy security risk, while manufacturing output, fuel consumption, financial interdependence, and urbanization have bidirectional causalities on energy security risk as per the Dumitrescu-Hurlin panel causality test results. The findings show that G-7 countries have varying levels of EE. The average EE of G-7 countries is large (with most member countries falling short of the average), coupled with a large standard deviation (suggesting wide EE disparities among member countries). Dynamic productivity is also affected by the 2007 global economic crisis that was sparked in the US. Besides that, we show that the G-7 nations use both “catch-up” and “border shift” tactics to boost EE and to reduce G-7-specific energy security risks.

Suggested Citation

  • Fan, Qiuyan & Hajiyeva, Aytan Merdan, 2022. "Nexus between energy efficiency finance and renewable energy development: Empirical evidence from G-7 economies," Renewable Energy, Elsevier, vol. 195(C), pages 1077-1086.
    • Handle: RePEc:eee:renene:v:195:y:2022:i:c:p:1077-1086
    DOI: 10.1016/j.renene.2022.06.113
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