Dynamic impact of globalization on renewable energy consumption: Non-parametric modelling evidence

Renovative energies are often presented as the primary alternative for addressing the climate challenge. This paper proposes a non-parametric method to study the relationship between globalization and aggregated (disaggregated) renewable energy consumption for a panel of 15 nations over the period 1990–2018. Specifically, we draw on the local linear dummy variable estimation (LLDVE) method that allows us to capture, at each point in time, the impact of globalization on renewable energy consumption and how the relationship changed through time. The non-parametric panel data results show a time-varying relationship between globalization and renewable energy deployment, where it is negative and statically significant between 2002 and 2011, and then turns positive and statically significant for the post-2014 period. We also find that globalization exhibits heterogeneous impacts depending on the renewable energy measure used. The time-varying effects suggest that globalization is driving renewable energy consumption through various channels, with some channels appearing to be more prominent at specific times. Therefore, there is a need for policymakers to consider the role of globalization when designing policies related to renewable energy adoption or transition, especially being proactive in policy formulation, considering what channels the process of globalization operates through.