Finance for renewable energy: an empirical analysis of developing and transition economies
Brunnschweiler, Christa N.
- Working Paper
Rights / licenseIn Copyright - Non-Commercial Use Permitted
This paper examines the role of the financial sector in renewable energy (RE) development. Although RE can bring socio-economic and environmental benefits, its implementation faces a number of obstacles, especially in non-OECD countries. One of these obstacles is financing: underdeveloped financial sectors are unable to e±ciently channel loans to RE producters. The influence of financial sector development on the use of renewable energy resources is confirmed in panel data estimations on up to 119 non-OECD countries for 1980-2006. Financial intermediation, in particular commercial banking, has a significant positive effect on the amount of RE produced, and the impact is especially large when we consider non-hydropower RE such as wind, solar, geothermal, and biomass. There is also evidence that the adoption of the Kyoto Protocol has had a significant positive impact on the development of the RE sector. Show more
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Journal / seriesEconomics Working Paper Series
PublisherETH Zurich, Center of Economic Research (CER-ETH)
SubjectRenewable energy; Financial sector; Banking; Development
Organisational unit02045 - Dep. Geistes-, Sozial- u. Staatswiss. / Dep. of Humanities, Social and Pol.Sc.
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