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Moderating Effect of Financial Development on the Relationship between Renewable Energy and Carbon Emissions

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  • Yi-Bin Chiu

    (Institute of Western China Economic Research, Southwestern University of Finance and Economics, Chengdu 611130, China)

  • Wenwen Zhang

    (School of Management, Xihua University, Chengdu 610039, China)

Abstract

This study investigates the moderating effect of financial development on the renewable energy–CO 2 emissions nexus in OECD countries. We find that both composite financial development and banking sector development have an inverted U-shaped impact on CO 2 emissions, while stock market development has a U-shaped impact on CO 2 emissions. Further, an increase in renewable energy will reduce CO 2 emissions, and this reducing impact is affected by different levels of financial development. When promoting financial development, policymakers should pay more attention to its role in enhancing renewable energy, which is related to emissions reduction.

Suggested Citation

  • Yi-Bin Chiu & Wenwen Zhang, 2023. "Moderating Effect of Financial Development on the Relationship between Renewable Energy and Carbon Emissions," Energies, MDPI, vol. 16(3), pages 1-18, February.
    • Handle: RePEc:gam:jeners:v:16:y:2023:i:3:p:1467-:d:1055059
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