Renewable energy consumption and international trade: Does climate policy stringency matter?

This study explores the connection between renewable energy consumption and international trade, with a particular focus on the influence of climate policy. We argue that this relationship is nonlinear and subject to threshold effects. Using a dynamic threshold model developed by Seo and Shin (2016)...

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Published inEnergy policy Vol. 206; p. 114728
Main Authors Nouira, Ridha, Ben Salem, Leila, Saafi, Sami, Rault, Christophe
Format Journal Article
LanguageEnglish
Published Elsevier Ltd 01.11.2025
Subjects
Climate policy stringency
Dynamic threshold model
International trade
Renewable energy consumption
Sustainable development
International trade
C5
Q4
Q5
Climate policy stringency
F1
Renewable energy consumption
Sustainable development
Dynamic threshold model
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Abstract This study explores the connection between renewable energy consumption and international trade, with a particular focus on the influence of climate policy. We argue that this relationship is nonlinear and subject to threshold effects. Using a dynamic threshold model developed by Seo and Shin (2016), we analyze data from 1990 to 2023 for a panel of 29 developed and developing countries. Our findings reveal that climate policy plays a crucial role in shaping the renewable energy–trade nexus, with effects varying according to policy stringency and a country's development level. In developing countries, renewable energy consumption consistently enhances exports, regardless of policy stringency. In contrast, in developed countries, strict policies reduce import dependence, indicating a move toward energy independence, but they may also dampen the positive trade effects of renewable energy due to higher compliance costs and regulatory barriers. These results underscore the need for tailored policy strategies: developed countries should balance ambitious environmental goals with trade efficiency by streamlining regulations and fostering international policy harmonization, while developing countries can leverage renewable energy adoption as a tool to enhance exports, attract investment, and strengthen technological capabilities. •We investigate the nonlinear impact of climate policy on renewable energy and trade.•We apply a dynamic threshold model to 1990–2023 data from 29 countries.•We find that stringent climate policies reduce renewable energy's trade benefits.•Our results offer valuable insights for developing sustainable, long-term policies.
AbstractList This study explores the connection between renewable energy consumption and international trade, with a particular focus on the influence of climate policy. We argue that this relationship is nonlinear and subject to threshold effects. Using a dynamic threshold model developed by Seo and Shin (2016), we analyze data from 1990 to 2023 for a panel of 29 developed and developing countries. Our findings reveal that climate policy plays a crucial role in shaping the renewable energy–trade nexus, with effects varying according to policy stringency and a country's development level. In developing countries, renewable energy consumption consistently enhances exports, regardless of policy stringency. In contrast, in developed countries, strict policies reduce import dependence, indicating a move toward energy independence, but they may also dampen the positive trade effects of renewable energy due to higher compliance costs and regulatory barriers. These results underscore the need for tailored policy strategies: developed countries should balance ambitious environmental goals with trade efficiency by streamlining regulations and fostering international policy harmonization, while developing countries can leverage renewable energy adoption as a tool to enhance exports, attract investment, and strengthen technological capabilities. •We investigate the nonlinear impact of climate policy on renewable energy and trade.•We apply a dynamic threshold model to 1990–2023 data from 29 countries.•We find that stringent climate policies reduce renewable energy's trade benefits.•Our results offer valuable insights for developing sustainable, long-term policies.
ArticleNumber 114728
Author Ben Salem, Leila
Saafi, Sami
Nouira, Ridha
Rault, Christophe
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  surname: Nouira
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  organization: ISFF and LAMIDED Sousse University, Tunisia
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  givenname: Leila
  surname: Ben Salem
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  givenname: Christophe
  surname: Rault
  fullname: Rault, Christophe
  email: chrault@hotmail.com
  organization: LEO, Université d′Orléans, Rue de Blois-B.P. 6739, 45067 Orléans Cedex 2, France1
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Climate policy stringency
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Snippet This study explores the connection between renewable energy consumption and international trade, with a particular focus on the influence of climate policy. We...
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SubjectTerms Climate policy stringency
Dynamic threshold model
International trade
Renewable energy consumption
Sustainable development
Title Renewable energy consumption and international trade: Does climate policy stringency matter?
URI https://dx.doi.org/10.1016/j.enpol.2025.114728
Volume 206
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