Could natural resources and financial development influence the markets for renewable energy in developing economies?

Governments and stakeholders are prioritising sustainable development for economic growth and environmental quality. Oil-producing economies rely heavily on oil revenues, which can negatively impact the environment. This dilemma raises the question of protecting environmental quality or pursuing economic development. Financial development is crucial for technological innovation, energy-efficient projects, and renewable energy generation. This paper applied the Methods of ‘Moments Quantile Regression’ to examine the impact of financial development on renewable energy (RE) generation in the top three net oil exporters and importers from 1990 to 2020. The results show that financial development is consistently associated with higher levels of RE generation per capita in these countries. Meanwhile, the lack of a statistically significant association between natural resource rents and RE generation suggests that abundant natural resources do not inherently constrain RE development in these African countries.