Energy-related risk and renewable energy sources across the G7 economies: A matter of reliability and low carbon

Abstract

Given the perspective that energy security is central to sustainable development and climate goal, the role of risk associated with energy in renewable energy development is examined by considering the group of the world’s most developed economies, i.e., the G7 economies. By implementing the Quantile-on-Quantile Regression (QQR) approach and its heatmap representation for the dataset that covers the period 1996 to 2022, the investigation reveals that an increase in energy-related risk limits the use of renewable energy in Canada, France, Italy, the United Kingdom, and the United States of America. Although there are slight country-specific variations in this relationship across the quantiles, the evidence largely suggests the importance of addressing the specificity of energy-related risk to promote renewable energy development. While evidence in Germany largely shows a mixed relationship, i.e., positive and negative between energy-related risk and renewable energy, a positive association is established for the case of Japan. Thus, we reasoned that the risk associated with alternative energy sources such as nuclear energy in Japan, has possibly incentivized the renewable energy uptake in the country. Meanwhile, these results offer significant policy relevance from the perspectives of clean energy development, energy reliability, and other energy-related actions.