AI Summary & Key Takeaways
AI InsightThese findings indicate that economic growth and energy consumption structures in lower-middle-income countries are still largely dependent on fossil fuels, emphasising the need for policy interventions to support the transition to renewable energy.
📌 3 Key Takeaways
Abstract
The transition to renewable energy is of critical importance for the economic, environmental, and social development of nations. The accessibility and environmentally friendly nature of renewable energy sources play a vital role in achieving sustainable development goals, particularly in lower-middle-income countries. In this context, examining the potential of economic growth to increase energy demand, the impact of urbanisation on transforming energy consumption patterns, and the critical role of financial support in directing energy projects is essential for predicting the potential effects of the fundamental dynamics shaping renewable energy use. This study intends to analyse the impact of domestic credit, urbanisation, and per capita income on renewable energy consumption in lower-middle income countries. The analysis uses annual data covering the period from 2000 to 2021. The results reveal that credit negatively affects renewable energy consumption. This indicates that financial resources are insufficiently directed towards renewable energy projects or that the existing financial infrastructure tends to favour investments in fossil fuel-based projects. Similarly, the increase in urbanisation also negatively affects renewable energy use. As urbanisation increases, energy consumption patterns tend to rely more on conventional energy sources. Moreover, economic growth, measured by GDP per capita, was found to reduce renewable energy consumption. These findings indicate that economic growth and energy consumption structures in lower-middle-income countries are still largely dependent on fossil fuels, emphasising the need for policy interventions to support the transition to renewable energy.