The importance of risk, volatinily, and green finance in encouracing inverstments in renew able enegy in the wake of the COVID-19 epidemic: Evidence form G7 countries

Abstract

Thanks to the Industrial Revolution, the world economy has been developing rapidly. However, the rapid growth has led to environmental damage and rising concerns about climate change. Global environmental policies have been established and developed throughout recent years to ease the situation and reshape sustainability. Enhancing energy savings and investing in renewable energy sources are crucial driving forces that may lead to long-term sustainable outcomes. This study aims to find the relationship between renewable energy investment and the factors relating to environments, such as oil volatility, the green bonds, and related risks in the period of the Covid-19 breakout. Different regression approaches and estimations were adapted to estimate direct and indirect relationships between the variables of interest. As found, green financing has a positive impact on renewable energy investment. Therefore, promoting green finance would be the key to reaching sustainable goals. In a different view, oil price volatility and geopolitical risks should be minimized as they would negatively affect investment in renewable energy. This research also justifies environmental tax’s moderating role while strengthening the link between green financing and renewable energy investment. Understanding both theoretical and empirical findings, the study has provided useful insights for policymakers and environmentalists in designing and implementing environmentally sustainable practices.