From climate risk to resilience: Why does public-private partnership in energy matter?

This study examines the dynamic and non-linear relationships between public–private partnerships in energy (PPPIE) and climate risks across different institutional quality thresholds using the Panel Vector Autoregressive (PVAR) and dynamic panel threshold models for a sample of seven countries over the period 2002–2022. The findings show that PPPIE induces a positive response in climate risk throughout the ten periods, reaching its maximum around the third period before progressively dissipating and approaching zero, suggesting that the transmission of the shock is largely transitory. The results also confirm significant threshold effects and non-linear relationships. Institutional quality exhibits a threshold effect in the relationship between public–private partnerships in energy and climate risks. While public–private partnerships in energy have no significant effect on climate risks when institutional quality remains below the estimated threshold, they significantly increase climate risks once the threshold is exceeded. This finding highlights the conditioning role of institutional quality in strengthening the transmission of energy-related infrastructure investments to climate-related vulnerabilities. Policymakers should integrate climate risk management into energy-related public–private partnership frameworks, particularly when institutional quality improves, and large-scale infrastructure investments expand.