Political economy of renewable energy transitions: Technology-specific responses to geopolitical risk and political stability in G7 economies.

Abstract

The global transition to renewable energy faces increasing challenges from geopolitical uncertainties, political instabilities, and varying innovation capabilities across different technologies and countries. This study examines the heterogeneous effects of geopolitical risk, political stability, and the moderating role of technological innovation on renewable energy deployment. The study examined solar PV, onshore wind, and hydropower technologies in G-7 countries from 2000 to 2024. The study adopted Driscoll-Kraay standard errors and Panel FMOLS estimation techniques. The analysis reveals significant technology-specific vulnerabilities to external factors. Geopolitical risk substantially reduces solar PV deployment by 1.99 % and hydropower by 1.98 % per unit increase, while wind energy demonstrates resilience. Political stability proves critical only for hydropower development, requiring extensive institutional coordination. Technological innovation emerges as both a direct catalyst for solar expansion and a crucial moderating factor mitigating geopolitical risks for hydropower. These findings challenge assumptions of uniform renewable energy responses and underscore the necessity for technology-specific policy approaches rather than generalized strategies in an increasingly uncertain geopolitical landscape.