How Does the Development of the Financial Industry Advance Renewable Energy?
This paper investigates how the development of the financial industry connects with renewable energy. The authors analyze 198 countries over three decades in various model settings (fixed effects, random effects, dynamic panel). They use a wide range of proxies for the development of the financial industry and establish that in general this development has a positive impact on renewable energy capacity. Especially, the relative size of the commercial banking industry as well as of private credit and the size of the financial industry play a crucial role in advancing renewable energy investments.[This paper was presented at the UNEP Inquiry/Centre for International Governance Innovation Academic Symposium on the Design of a Sustainable Financial System, held in Waterloo (Canada) in December 2014]