Who's Going Green and Why? Trends and Determinants of Green Investment
December 1, 2011
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Summary
This paper fills a gap in the macroeconomic literature on renewable sources of energy. It offers a definition of green investment and analyzes the trends and determinants of this investment over the last decade for 35 advanced and emerging countries. We use a new multi-country historical dataset and find that green investment has become a key driver of the energy sector and that its rapid growth is now mostly driven by China. Our econometric results suggest that green investment is boosted by economic growth, a sound financial system conducive to low interest rates, and high fuel prices. We also find that some policy interventions, such as the introduction of carbon pricing schemes, or "feed-in-tariffs," which require use of "green" energy, have a positive and significant impact on green investment. Other interventions, such as biofuel support, do not appear to be associated with higher green investment.
Subject: Greenhouse gas emissions, Non-renewable resources, Renewable energy, Renewable resources, Technology
Keywords: cost, GI, green energy, WP
Pages:
39
Volume:
2011
DOI:
Issue:
296
Series:
Working Paper No. 2011/296
Stock No:
WPIEA2011296
ISBN:
9781463927301
ISSN:
1018-5941
