Catalyzing renewable energy deployment in the Mercosur economies: A synthesis of human capital, technological innovation and green finance

Abstract

It has become a global agenda for the transition toward sustainable energy systems; the Mercosur region faces unique opportunities and challenges in harnessing the potential of renewable resources. Against this backdrop, this study thoroughly investigates the determinants of renewable energy consumption (REC) for Mercosur nations. The research examined the influence of economic expansion, green finance, technological innovation, human capital, government effectiveness, and urbanization on the integration and transition of REC. Incorporating a comprehensive approach, the study integrated the CS-ARDL econometric model and panel data for over three decades (1990–2021). The analysis revealed that economic expansion, green finance, technological innovation, human capital and government effectiveness are advantageous and essential for advancing REC deployment in the Mercosur nations. In addition, the outcome espoused that urbanization is detrimental to the progress of REC. Moreover, there is a one-way causality between economic expansion, green finance, technological innovation and green finance to REC. Still, there is a bi-directional link between human capital, urbanization, and renewable energy consumption. The outcome of this paper contributes to the ongoing discussion on sustainable development, providing essential insight for stakeholders, policy-makers and researchers seeking to investigate the complexities of transitioning towards a more resilient and greener energy landscape.