How does artificial intelligence promote renewable energy development? The role of climate finance

Abstract

Scholars, stakeholders, and the government have given significant attention to the development of renewable energy in recent times. However, previous research has failed to acknowledge the potential impact of artificial intelligence on advancing renewable energy development. Drawing insights from a global dataset encompassing 63 countries over the period 2000–2019, this paper provides significant observations regarding the influence of artificial intelligence on the progress of renewable energy, by using the Instrumental Variable Generalized Method of Moments model. We also explore their asymmetric nexus, and the potential mediation effect. Moreover, this study explores the moderating role of climate finance and highlights the following interesting findings. First, artificial intelligence contributes significantly to the enhanced development of renewable energy, and this primary finding holds after two robustness tests of changing independent and dependent variables. Second, artificial intelligence has an asymmetric effect on renewable energy development, and their nexus is closer in countries with lower levels of renewable energy development. Thid, artificial intelligence works on renewable energy development through technology effect and innovation effect. Fourth, climate finance also presents direct benefits to renewable energy development; simultaneously, climate finance plays an effective moderating role in the relationship between artificial intelligence and renewable energy development. These findings inspire us to propose policy implications to promote the enhanced development of renewable energy.