It only works if you believe in it: How climate change awareness affects the effectiveness of energy initiatives

The aim of this paper is to empirically assess the role of climate change awareness in determining the success or failure of energy initiatives in promoting investments in renewable, solar and wind energies. Energy initiatives are classified into two categories: market-based energy policies and energy legislation. The analysis relies on a panel dataset of 53 countries, covering the period from 2004 to 2022, and the estimation strategy is performed using the two-step version of the system GMM estimator. We examine how different levels of climate change awareness affect the marginal effects of energy initiatives. We observe a positive and significant impact of climate change awareness on the effectiveness of both market-based energy policies and energy legislation. We also find that market-based renewable and solar energy policies are ineffective or even counterproductive for low levels of awareness and become effective when awareness is high. A similar pattern is observed for energy legislation in the case of solar energies. We also identify countries where climate change awareness is sufficiently high to ensure that energy initiatives are effective and others where it is not. In this last group of countries, increasing climate change awareness is a necessary condition for the success of energy initiatives and a powerful lever to support the energy transition.