BEYOND SUNLIGHT: HOW CO2 EMISSIONS, COAL LOCK-IN, AND GLOBAL FINANCE SHAPE AUSTRALIA’S SOLAR ENERGY CONSUMPTION - AN ARDL ANALYSIS WITH ROBUSTNESS CHECKS
DOI:
https://doi.org/10.2478/eoik-2025-0095Keywords:
Solar energy consumption, coal consumption, financial globalization, CO2 emissions, population growth, economic growth, climate policy, AustraliaAbstract
This study examines the determinants of solar energy adoption in
Australia between 1991 and 2023 using an Autoregressive Distributed
Lag (ARDL) model. The results reveal long-run equilibrium relation-
ships and short-run adjustment mechanisms between solar deploy-
ment and the most pertinent economic, environmental, and financial
factors. The results reveal some significant findings. First, financial
globalization shows a strong negative long-run effect on Solar Energy
Consumption. (SEC), suggesting that international capital flows have
previously endorsed fossil fuel systems rather than renewable transi-
tions. Second, coal consumption illustrates a strong negative effect,
confirming path dependency challenges. Thirdly, while CO2 emis-
sions and GDP per capita have a positive effect on SEC, population
growth has a negative relationship, suggesting that urbanization may
precede the establishment of renewable infrastructure. The study’s
policy implications underscore three strategic priorities: accelerating
the transition away from coal and toward clean energy systems, trans-
forming financial markets to encourage green investment, and chan-
neling economic growth to build sustainable energy infrastructure.
These are the proposals that have been advocated to address structural
challenges for Australia’s energy transition while taking advantage
of the strengths that have been built. The research presents empirical
evidence for integrated policy strategies in orchestrating economic
development and decarbonization goals within resource endowments.
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