Transition towards clean energy consumption in G7: Can financial sector, ICT and democracy help?

This study investigates the long-term relationship between financial inclusion, infrastructure for information and communication technology, fossil fuel usage, participatory democracy, and renewable energy use in G7 countries. Based on a cointegration test with structural breakdowns, our results give considerable evidence of a long-term relationship between these variables. The majority of quantiles demonstrate that financial inclusion has a negative and substantial effect on renewable energy usage. On the other hand, the coefficient for information and communication technology infrastructure is positive and statistically significant at all quantiles, while the co-efficient for fossil fuel consumption effects renewable energy use adversely and is statistically significant at all quantiles. The findings of the Granger non-causality test suggest bidirectional causality between renewable energy usage and information and communication technology infrastructure and financial inclusion, whereas fossil fuel use and participatory democracy exhibit unidirectional causality. On the basis of these results, we recommend government policies to incentivize people and businesses to embrace renewable energy, financial innovation to help the energy transition process, and the dissemination of knowledge about renewable energy sources, particularly in rural regions. Citizens' engagement is also essential, and decentralization and enhanced local decision-making may facilitate this. This research underscores the need for a coordinated strategy combining financial institutions, governments, and individuals in order to transition to a low-carbon economy.