Economic Policy Uncertainty, Financial Development, and Renewable Energy Consumption in BRIC

Abstract

In the context of climate change mitigation, investment in clean energy has become indispensable. Supporting renewable energy (RE) investments through incentives is key to environmentally sustainable development. The financial sector has a pivotal role in improving the RE sector. This paper examines the importance of financial development and economic policy uncertainty (EPU) in real estate RE consumption in BRIC countries. Based on panel data estimation methods and annual data from 2003 to 2019, the findings reveal that financial development and economic growth have a positive influence on RE consumption. Apart from this, EPU harms RE consumption. Financial development and better economic performance promote RE consumption, while EPU curtails it. The Granger non-causality test reveals a positive causal relationship between financial development and RE consumption in BRIC economies. The study’s significant findings, with important policy implications, suggest improving national financial systems and reducing uncertainty in political decision-making processes. © The Author(s), under exclusive licence to Springer Science+Business Media, LLC, part of Springer Nature 2026.