The transition to renewable energy is inevitable as geopolitical risks drag on: a closer empirical look at MENAT oil importers.

Abstract

This paper investigates the impact of geopolitical risks on renewable energy generation in MENAT oil-importing countries, namely, Egypt, Tunisia, and Turkey over the period 1990-2020 using the autoregressive distributed lag (ARDL) model. The main findings emphasize that geopolitical risks play a crucial role in inducing renewable energy development in MENAT oil-importing countries in the short and long run. Financial development appears to positively and significantly affect renewable energy generation in the three countries. Furthermore, the speeds of adjustment towards the long-run equilibrium are 36.78%, 66.03%, and 17.81% annually in Egypt, Tunisia, and Turkey, respectively. In today's volatile and turbulent world, dramatically rising geopolitical risks make the transition to renewable energy an inevitable reality. Consequently, it is incumbent upon policymakers and relevant authorities in MENAT oil-importing countries to preemptively redirect their efforts and strategies to conform to the demands of the inevitable transition to renewable energy sources and boost energy self-reliance.