The Path to Sustainable Development: The Impact of Financial Development on Renewable Energy in G20 Economies

Abstract

The reliance on fossil fuels has facilitated rapid industrialization and technological advancement. However, it also has led to significant environmental challenges, notably the increase in CO2 emissions contributing to global climate change. In this context, the shift towards renewable energy sources has emerged as a strategy for mitigating environmental degradation and promoting sustainable development. This study examines the impact of capital market development, which is one of the subcomponents of financial development, on renewable energy consumption in G20 countries during the period 1999–2022. The factors affecting renewable energy consumption are identified as capital market development, inflation, gross domestic product, domestic firms’ trading volume, and foreign direct investment. Using a comprehensive panel data set, random/fixed effects models were applied to analyse the interaction between capital market development and renewable energy consumption. Findings of the analyses show that GDP has a negative effect on renewable energy consumption. Research shows that as per capita income increases, the use of renewable energy decreases, while fossil fuel consumption rises. Additionally, a large portion of the loans provided to the private sector and the financing offered by banks is directed toward fossil fuel-based energy consumption instead of renewable energy. On the other hand, empirical results also indicate a negative relationship between inflation and renewable energy consumption. The rising costs of materials and components used in renewable energy projects, the increase in interest rates that makes financing these projects more expensive, and higher operational costs are factors that contribute to tightening budgets and growing economic uncertainty. High inflation increases uncertainty in markets, causing investors to become anxious. Finally, contrary to expectations, financial development, foreign direct investment, and traded stock have no direct impact on renewable energy consumption.

Keywords

• Financial development
• Renewable energy consumption
• G-20 countries
• Panel data analysis

Sürdürülebilir Kalkınmaya Giden Yol: G20 Ekonomilerinde Finansal Gelişmenin Yenilenebilir Enerji Üzerindeki Etkisi

Abstract

Fosil yakıtlara olan bağımlılık hızlı sanayileşmeyi ve teknolojik ilerlemeyi kolaylaştırmıştır. Ancak bu durum aynı zamanda karbondioksit emisyonlarının artışıyla küresel iklim değişikliğine katkıda bulunarak önemli çevresel sorunlara neden olmuştur. Bu bağlamda, yenilenebilir enerji kaynaklarına yönelim, çevresel bozulmayı hafifletmek ve sürdürülebilir kalkınmayı teşvik etmek için önemli bir strateji olarak ortaya çıkmıştır. Bu çalışma, 1999-2022 döneminde G20 ülkelerinde finansal gelişmenin alt bileşenlerinden biri olan sermaye piyasası gelişiminin yenilenebilir enerji tüketimi üzerindeki etkisini incelemektedir. Yenilenebilir enerji tüketimini etkileyen faktörler sermaye piyasası gelişimi, enflasyon, gayri safi yurtiçi hasıla, yerli şirketlerin işlem hacmi ve doğrudan yabancı yatırım olarak belirlenmiştir. Kapsamlı bir panel veri seti kullanılarak, sermaye piyasası gelişimi ve yenilenebilir enerji tüketimi arasındaki etkileşimi analiz etmek için rassal/sabit etkiler modelleri uygulanmıştır. Bulgulara göre gayri safi yurt içi hasıla, yenilenebilir enerji tüketimi üzerinde negatif bir etkiye sahiptir. Ayrıca kişi başına düşen gelir yükseldikçe, yenilenebilir enerji kullanımının azaldığı, buna karşılık fosil yakıt tüketiminin arttığı görülmektedir. Ayrıca, özel sektöre sağlanan kredilerin ve bankaların sunduğu finansmanın büyük bir kısmı, yenilenebilir enerji yerine fosil yakıt bazlı enerji tüketimine yönlendirilmektedir. Diğer yandan ampirik sonuçlara göre enflasyon ve yenilenebilir enerji tüketimi arasında da negatif ilişki vardır. Yenilenebilir enerji projelerinde kullanılan malzeme ve bileşenlerin maliyetlerinin artması, bu projelerin finansmanını daha pahalı hale getiren faiz oranlarındaki yükseliş ve artan operasyonel giderler, bütçelerin daralmasına ve ekonomik belirsizliğin büyümesine sebep olan unsurlar arasında sayılabilir. Yüksek enflasyon, piyasalarda belirsizliği artırarak, yatırımcıların endişeli hale gelmesine yol açar. Son olarak beklentilerin aksine, finansal gelişmenin, doğrudan yabancı yatırımların ve yerli şirketlerin işlem hacminin yenilenebilir enerji tüketimi üzerinde doğrudan bir etkisi bulunmamaktadır.

Keywords

• Finansal gelişme
• Yenilenebilir enerji tüketimi
• G20 ülkeleri
• Panel veri analizi

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