International Trade and Transition to Renewable Energy

This analysis investigates how international trade variables influence renewable energy adoption across countries, focusing on trade barriers and incentives, the role of multinational corporations, and the effect of trade agreements on competitiveness. By adopting a quantitative research design using panel data analysis to investigate the role of international trade in the adoption and diffusion of renewable energy technologies across countries. The research focuses on a sample of 60 countries, including both developed and developing nations, over the period 2000-2022. Findings provide evidence that international trade plays a crucial role in the adoption and diffusion of renewable energy technologies. Trade openness and trade agreements with renewable energy provisions positively influence the adoption of renewable energy, while trade barriers have a negative effect. The study also finds that foreign direct investment in renewable energy significantly contributes to technology transfer and capacity building in host countries. Thus, it is important to reduce trade barriers and promote technology transfer, designing trade agreements that incentivize renewable energy investments, and encouraging multinational corporations to align their investments with local renewable energy goals. By leveraging international trade effectively, countries can accelerate the adoption of renewable energy technologies and achieve sustainable development goals.