Green finance and digital economic infrastructure in the UK's energy transition: Insights from quantile-on-quantile and KRLS methods

This study proposes a UK energy transition policy framework aligned with SDG 7 (Affordable and Clean Energy), examining the exogenous between green finance (GF), the digital economy (DE), and the renewable energy transition (RET). Using principal component analysis, it constructs digital economy and energy transition indices. A Multivariate-QQR approach evaluates the parameters' impact, supplemented by sensitivity analysis KRLS, Quantile's comparison plots for validation. Results show GF has limited or negative influence on RET at lower quantiles but becomes significantly positive at higher levels, promoting large-scale clean energy investments. DE positively impacts RET, especially at mid-to-high quantiles, reflecting inter-quantile dependence. RET outcomes improve when both GF and DE are moderately to highly developed. KRLS regression confirms these relationships, showing that a 1% increase in GF and DE yields average RET improvements of 0.111% and 0.487%, respectively. Granger causality tests reveal GF drives RET, while DE and RET are bidirectionally linked; no causality is observed between GF and DE. The study supports a policy approach integrating GF and DE to accelerate the UK's energy transition and achieve sustainable development goals. It offers critical insights for policymakers to align financial and digital strategies with clean energy objectives.