Toward Resilient and Efficient Renewable Energy in the EU: The Role of Climate Risk and Financial Conditions

This study assesses renewable energy efficiency and resilience in the European Union (EU), comparing the Baltic Sea Region (BSR) and non-BSR (NBSR). It explores how efficiency and resilience are related and identifies financial factors that can strengthen both, in line with COP29 climate finance goals. Results show that climate risk reduces efficiency more severely in the BSR, while the NBSR demonstrates stronger resilience. Research and development (R&D) alone does not improve renewable energy efficiency resilience (REER), but when combined with foreign direct investment (FDI), outcomes improve, particularly in the NBSR. Other interactions, such as those involving green insurance, may instead weaken resilience. By incorporating these interaction effects, the model better captures complex relationships and improves performance. The study suggests that future research should integrate interaction terms and refine resilience indicators to reflect real-world dynamics, supporting more effective policies for renewable energy transitions under climate risk.