Financing green futures: renewable energy investment and economic growth in Germany
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Abstract
Global efforts to mitigate greenhouse gas emissions have been driven by increasingly evident adverse impacts of climate change. Countries are adopting renewable energy sources, such as solar, wind, hydropower, geothermal, and bioenergy, which provide cleaner alternatives to fossil fuels. Investments in renewable energy facilitate the decarbonization of the energy sector, while simultaneously stimulating the economy through job creation, technological advancement, and innovation. This study examines the relationship between renewable energy financing and economic growth in Germany. Annual time series data from 1986 to 2022 and a Nonlinear Autoregressive Distributed Lag model were used. The research findings indicate a correlation between renewable energy financing and economic growth. The study indicates that a disturbance in combustible renewable energy and waste will, according to the long-term findings, exert a negative impact of 0.21 on economic growth. In general, financing renewable energy is believed to play a role in Germany’s economic growth. The study recommends that policymakers enhance their funding for colleges and research institutions to develop more viable ways to enhance renewable energy production and adoption.
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