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The Impact of Financial Development and Climate Change on Energy Transition in Iran
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Tahereh Dehghani1   , Sakine Owjimehr *2 , Rouhollah Shahnazi1 |
1- Shiraz University
2- Shiraz University , s.ojimehr@shirazu.ac.ir |
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Abstract: (14 Views) |
The increasing use of fossil fuels and their adverse environmental consequences, including global warming and air pollution, have intensified the need for a transition toward renewable energy sources. This study aims to examine the effects of financial development and climate change on energy transition in Iran over the period 1989–2021. Given the presence of endogeneity, the Generalized Method of Moments (GMM) is employed to estimate the model.The empirical findings indicate that financial development has a positive and statistically significant impact on energy transition. To capture climate change, two indicators—average temperature changes and the Notre Dame Global Adaptation Initiative (ND-GAIN) climate risk index—are utilized. The results reveal that average temperature changes exert a negative effect on energy transition, whereas the ND-GAIN index has a positive and significant impact. Furthermore, among the control variables, economic growth and fossil fuel consumption negatively affect energy transition, while urbanization has a positive effect. These findings suggest that improving financial and energy infrastructures, along with implementing effective policies to reduce dependence on fossil fuels, can play a crucial role in accelerating the energy transition in Iran.
JEL Classification: C01, C22, G21, Q54.
Keywords: Climate change, financial development, Energy transition, Generalized Method of Moments (GMM)
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| Keywords: JEL Classification: C01, C22, G21, Q54.
Climate change, financial development, Energy transition, Generalized Method of Moments (GMM) |
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Full-Text [PDF 794 kb]
(17 Downloads)
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Type of Study: Thesis(M.A.) |
Subject:
Environment
Received: 2025/11/22 | Accepted: 2026/05/5 | Published: 2026/10/2 | ePublished: 2026/10/2
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