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The constraining dynamics of political instability on renewable energy development: International evidence

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  • Huang, Xinpeng
  • Wen, Huwei

Abstract

The transition from fossil fuel dependence to renewable energy systems constitutes a critical challenge for global carbon neutrality, yet this process faces fundamental uncertainties arising from political instability. This study systematically examines how political instability structurally constrains renewable energy development: dynamic evolutionary patterns, nonlinear marginal effects, and institutional transmission mechanisms. Using panel data from 108 countries from 2003–2020, this paper investigates the dynamic evolution of renewable energy development and empirically tests the impact of political instability on renewable energy development. The robustness test confirmed the above conclusion through the instrumental variable method. The results show that political instability inhibits renewable energy development. Renewable energy development demonstrates phase-specific vulnerability, being most sensitive to political risk during its embryonic and growth stages. Further research shows that the marginal effect of political instability on renewable energy development first increases and then decreases. Mechanistic analysis reveals that political instability affects renewable energy development by influencing the effectiveness and stability of policy and market systems. These insights yield operational policy suggestions that implement stage-differentiated regulatory frameworks, establish cross-administration renewable policy continuity mechanisms, and design political risk hedging instruments tailored to development phases.

Suggested Citation

  • Huang, Xinpeng & Wen, Huwei, 2025. "The constraining dynamics of political instability on renewable energy development: International evidence," Renewable Energy, Elsevier, vol. 246(C).
    • Handle: RePEc:eee:renene:v:246:y:2025:i:c:s0960148125005518
    DOI: 10.1016/j.renene.2025.122889
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