OIL PRICE UNCERTAINTY AND RENEWABLE ENERGY INNOVATION: AN INTERNATIONAL EVIDENCE

Abstract

Climate change is a significant global issue that is closely tied to efforts to decrease energy usage and increase energy efficiency. Over the last few decades, there has been a significant rise in interest regarding the development of renewable energy sources. However, despite widespread acknowledgement by researchers and policymakers of the need to shift towards renewable energy sources to address climate change, the world still relies heavily on fossil fuels. This thesis seeks to use negative binomial fixed effect model to examine how fluctuations in oil prices may affect the innovation of renewable energy technologies. Specifically, we focus on analyzing the impact of oil prices volatility on renewable energy patents count as a proxy for innovation. The study covers 80 countries over the period from 1991 to 2019. We argue that increased volatility in oil prices leads to greater innovation in renewable energy sources. Consistent with this view, we show that oil prices volatility positively impact the innovation in renewable energy.