Abstract
One of the current debatable global problems is climate change or global warming as crucial geopolitical risks. The progress of energy transition by considering geopolitical risk has not been considered seriously yet. This paper contributes to the literature by modeling and analyzing energy transition patterns in Russia with emphasis on geopolitical risks factor as a giant fossil fuels producer using the ARDL bounds testing method over the period of 1993–2018. The main results proved long-run negative impact of economic growth, population growth and inflation rate on energy transition of Russia, while CO2 emissions, geopolitical risk, exchange rate and financial openness have positive impacts on energy transition movement in the country. Furthermore, we found out that in the short-run, the relationship between energy transition improvement and economic growth, CO2 emissions, population growth and inflation rate is negative, while geopolitical risk, exchange rate and financial openness are the only variables which accelerate energy transition in the country. As major concluding remarks, Russia’s policy makers should draw attention to the long-run energy plans in the country. Furthermore, lowering dependency of Federals’ budget to the oil and gas revenues would be a useful policy to reduce negative impact of economic growth on energy transition movement in the country. Another recommendation is to determine rapid decarbonizing policies in the country.
Highlights
The fact of climate change or global warming, which has increased since the industrial revolution, has significantly affected geopolitical risk potential of countries leading to more interest in using green energy sources. [1] proved that green energy sources bring many advantages over non-renewable energy for international security and peace
The results proved that the series are cointegrated for a long-run linkage between energy transition, economic growth, exchange rate, CO2 emissions, population growth, inflation rate and financial openness in the case of Russia
This paper attempted to investigate the effects of various variables, i.e., economic growth, exchange rate, CO2 emissions, population growth, inflation rate, financial openness and geopolitical risk on energy transition in the case of the Russian economy over the period of 1993–2018
Summary
The fact of climate change or global warming, which has increased since the industrial revolution, has significantly affected geopolitical risk potential of countries leading to more interest in using green energy sources. [1] proved that green energy sources bring many advantages over non-renewable energy for international security and peace. Due to increasing awareness of danger of greenhouse emissions to the environment, the environmental factor began to be taken into account as a geopolitical risk, in the evaluation of energy projects, such as power plants, oil and gas projects, etc. Russia has contributed to approximately 12%, 17% and 5% of global oil, natural gas and coal productions, respectively, which show the giant place of this country in the world’s energy markets. The climate agenda, technological progress and the availability of new technology solutions are able to dramatically increase the efficiency of the energy sector and transform its traditional way of functioning, the desire among all countries to ensure the competitiveness of their national economies and boost their development of affordable energy, and last but not least, the Thermal Other renewable sources Hydro SustainFaibgiluitrye220.20S,h1a2r,e26o8f9renewable sources of energy in electricity generation in Russia, 2018, World Bank of 17 database. Numerous studies agree that energy consumption is mostly responsible for CO2 emissions [35] and directly or indirectly plays the principal role in environmental problems [36]
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