This paper explores the threshold impact of oil rents on renewable energy consumption in OPEC+ members for different financial development indicators. For this, we employ a dynamic panel threshold model for the time period 1999-2019.
The empirical findings of our analysis reveal significant and negative threshold and moderating effects for financial market and total financial development, but not for financial institution development. Specifically, oil rents decrease consumption
rates in renewable energy, with such negative effect becoming more pronounced for higher levels of financial market and total financial development. All in all, our results do not support the energy transition theory for OPEC+ members for which revenues from oil rents are transferred towards renewable energy investments. Rather, we validate the presence of lobby effects and inadequate support from financial markets and financial institutions. These results provide an additional debating point on the role of oil endowments on sustainable growth.