Antecedent and outcome study on energy transition - empirical evidence from G7 countries in TBL approach

Abstract

Increasing investment in energy R&D (SDG 7.4) is critical to fostering the renewable energy transition (SDG 7.2) and in a way to meet the global climate target (SDG 13). Although public investments in renewable energy are increasing, they remain insufficient to meet the G7 countries' climate commitments. In the present study, renewable R&D investment (RRDI) is considered as an antecedent variable to determine its influence on the outcome variable renewable energy share (RES) when mediated by transition variables. The energy transition variables are categorized into Triple Bottom Line (TBL) factors namely, Economic factors (Fossil Energy Price, Low carbon trade), Social factors (Nationally determined contributions, Unemployment), and Environmental factors (Renewable energy installed Capacity, Environmental Tax, Fossil Fuel Subsidies), they play the role of the mediating variables. The proposed conceptual framework is supported by regulatory focus theory to promote R&D investment. The hypotheses are tested for G7 countries' annual data spanning the years 2000 to 2021 using SPSS mediation analysis with Process-Macro. The analysis reveals that TBL factors are significantly enhancing the RRDI and RES relationships in Germany, Japan, and the UK. The USA and Japan experience less economic impact from oil price fluctuations. The NDCs are mediating to a greater extent to improve the relationship between R&D and renewable energy in Canada, France, and the UK. The lack of significant mediation effects of economic, social, and environmental factors in the USA and Italy indicates that policies in the USA and Italy are not strategically managed to improve the relationship between RRDI and RES. Further, the study suggests designing policies considering TBL principles to increase their average renewable R&D public investments to attain Sustainable Development Goal 7 (SDG7). The G7 energy transition has slowed down due to an imbalance in the policies to regulate the prevention-promotional aspects of the energy transition.