Oil price shocks and renewable energy transition: Empirical evidence from net oil-importing South Asian economies

This paper makes a novel attempt to model the nonlinear association between renewable energy consumption and crude oil prices concerning four net oil-importing South Asian economies: Bangladesh, India, Pakistan and Sri Lanka. Using annual data from 1990 to 2018, the long-run elasticity estimates confirm the nonlinear nexus and suggest that although rising crude oil prices do not facilitate renewable energy consumption initially, upon reaching a threshold level of crude oil price, further hikes in the oil prices are likely to elevate the renewable energy consumption figures. The estimated real oil price threshold, in this regard, is predicted to be around 135 US dollars per barrel, which is way above the prevailing oil price level. Identical nonlinearity is also confirmed in…