Energy innovation investment and renewable energy in OECD countries

Achieving carbon neutrality by 2050 remains fundamental to limiting global warming to 1.5 °C this century and mitigating the catastrophic effects of climate change. Policymakers have indicated that the transition towards a renewable energy economy is the catalyst for achieving this. Transitioning towards a renewable energy economy requires substantial investment in renewable energy technologies. While most empirical studies have explored the linkage between investment in research and development (R&D) and carbon emissions, not much is known empirically about the effect of energy innovation R&D on renewable energy generation. This study, therefore, contributes to the literature by investigating the impact of energy innovation R&D on renewable energy generation using a comprehensive panel dataset of 26 OECD countries from 1974 to 2020. Using a battery of robust alternative estimation methods, the results indicate that energy innovation R&D generally does not increase total renewable energy generation in the panel of OECD countries. The results further show that energy innovation R&D has a heterogeneous effect on disaggregated renewable energy sources such as solar energy, wind energy, nuclear energy, and hydro energy generation.