Do geopolitical risks facilitate the global energy transition? Evidence from 39 countries in the world

Abstract

Geopolitical risks exert a profoundly detrimental impact on global economy, investment and resource security. Do geopolitical risks affect the worldwide energy transition remains open and controversial. To complement research related to geopolitical risks and energy transition, this research checks the influence of geopolitical risks on energy transition. Based on data collected from 39 countries from 2003 to 2019, it reveals that geopolitical risks exert a promotion influence on energy transition, including energy consumption transition and energy production transition. Moreover, the influence of geopolitical risks on energy transition can be further amplified by improving financial incentive, energy efficiency level and government governance capacity. That is, financial incentive, energy efficiency level and government governance capacity can positively moderate the influence of geopolitical risks on energy transition. Additionally, heterogeneous analysis further uncovers that the influence of geopolitical risks on energy transition varies across economic level and regions. Specifically, the influence of geopolitical risks on energy production transition is relatively high in European and American developed countries, while the influence of geopolitical risks on energy consumption transition is more obvious in Asian, African and Latin American developing countries. Current findings are valuable for governments and scholars to promote energy transition.