Bayesian evaluation of finance, innovation, policy, and uncertainty as determinants of the OECD sustainable energy mix

The current study evaluates how policy uncertainty, green finance, green innovation, and environmental policy stringency affect the sustainable energy mix in OECD economies from 1996 through 2023. It fills an important gap in the existing literature, where these determinants have traditionally been viewed as independent rather than as part of a unified probabilistic model. In a given analysis, macro-policy uncertainty, climate-policy turbulence, financial variables, innovation, and regulatory intensity combine to form a single analytical framework, thereby addressing unanswered questions about how these variables interact to affect renewable-energy transitions. To address this weakness, the research questions include whether economic and global uncertainties asymmetrically harm sustainable energy development, whether climate-policy uncertainty can elicit positive behavioural responses, and whether green finance and innovation can counteract the harmful impact of uncertain policy regimes. The analytical methodology uses a set of Bayesian structures, including linear, heteroskedastic, multilevel, random-effects, and dynamic PVAR structures, to produce complete posterior distributions for each mechanism and to explain heterogeneity, feedback, and volatility across advanced economies. Findings show that there are continuously positive impacts of green finance, green innovation, and the tightness of environmental policy on renewable-energy growth; domestic and global uncertainties suppress growth and increase volatility. Climate-policy uncertainty, in turn, has a positive, stabilising effect within a credible institutional framework. The current study dynamically confirms that finance, innovation, and strict policy Granger-causally improve the energy mix, and it indicates a stable feedback mechanism in OECD entities. The experiment provides new evidence that the probabilistic interactions among financial mobilisation, technological capability, institutional credibility, and uncertainty environments govern sustainable-energy transitions, offering policy-designable insights to be acted upon to emphasise the roles of stability, long-term commitment, and the multifaceted acceleration of green innovation and investment.