How does physical climate risk impact renewable energy investment? Evidence from Belt and Road countries

By constructing a physical climate risk index and employing system GMM and double machine learning models, this study empirically explores the impact of physical climate risk on renewable energy investment across 64 Belt and Road countries from 2000 to 2022. The results indicate that physical climate risk significantly drives renewable energy investment, especially in hydropower and solar energy. Regional and temporal heterogeneity analyses show that investment growth is more pronounced in higher-income and coastal countries, as well as after the launch of the Belt and Road Initiative. Mechanism analysis reveals that physical climate risk can promote renewable energy investment by stimulating technological innovation. Furthermore, renewable energy policies and governance quality positively moderate the relationship between physical climate risk and renewable energy investment. This study extends the literature by clarifying how physical climate risk affects renewable energy investment in developing countries and offers policy insights for addressing climate risks and promoting clean energy transitions.