Who's Going Green and Why? Trends and Determinants of Green Investment

WPIEA2011296 Image
Price:  $18.00

Author/Editor: Luc Eyraud, Changchang Zhang, Abdoul Wane, Benedict J. Clements
Release Date: © December, 2011
ISBN : 978-1-46392-730-1
Stock #: WPIEA2011296
Stock Status: On back-order

Languages and formats available



This paper fills a gap in the macroeconomic literature on renewable sources of energy. It offers a definition of green investment and analyzes the trends and determinants of this investment over the last decade for 35 advanced and emerging countries. We use a new multi-country historical dataset and find that green investment has become a key driver of the energy sector and that its rapid growth is now mostly driven by China. Our econometric results suggest that green investment is boosted by economic growth, a sound financial system conducive to low interest rates, and high fuel prices. We also find that some policy interventions, such as the introduction of carbon pricing schemes, or "feed-in-tariffs," which require use of "green" energy, have a positive and significant impact on green investment. Other interventions, such as biofuel support, do not appear to be associated with higher green investment.

More publications in this series: Working Papers

More publications by: Luc Eyraud ; Changchang Zhang ; Abdoul Wane ; Benedict J. Clements