Work in Progress

Work In Progress

Resource Dependence and the Allocation of International Clean Energy Finance: Evidence from Developing Countries (Work in Progress)

Abstract: International clean energy finance does not reach developing countries evenly. A small group of recipients captures most of the flows. This paper asks whether natural resource dependence shapes that pattern and whether donors read different resource endowments as different signals. The analysis uses a balanced panel of 57 developing countries from 2000 to 2022. The sample covers about 72% of total committed clean energy finance. The empirical strategy is IV-GMM with Bartik shift-share instruments. These are built from country-specific resource exposure and global commodity prices. What the results show is that the effect of resource dependence depends on the type of resource. Fossil fuel rents link to lower inflows, which fits the carbon lock-in story. Mineral rents link to higher inflows, but only in countries producing minerals that matter for the energy transition. This points to donor interest in securing supply chains. For conventional mineral producers, the link is negative and mirrors the fossil fuel pattern. The same patterns show up in grant-based flows. So donor decisions drive the distribution, not commercial risk alone. Governance attracts finance but does not offset the penalty tied to fossil fuel dependence. Countries that rely most on carbon-intensive development need transition support the most and find it the hardest to get.

Biofuel Thresholds for Sustainable Transportation: Evidence and Policy Insights from Developing Countries (Work in Progress)

Abstract: Whether biofuel use is associated with lower transport emissions in developing countries is still contested. Existing evidence is mixed, and it offers little guidance for policymakers designing blending mandates and infrastructure investment. This paper argues that the inconsistency reflects a nonlinear underlying relationship. It identifies the consumption thresholds at which the association between biofuels and transport CO2 emissions turns from positive to negative. The analysis uses a balanced panel of 29 developing countries from 2000 to 2022. These countries are selected based on consistent data availability for biofuel use and bioenergy investment. The method combines instrumental-variable GMM with quantile instrumental-variable regression, using climate-based instruments built from country-year temperature anomalies alongside lagged endogenous variables. The results show a significant inverted-U pattern, with a turning point at a log biofuel consumption of 2.10, equivalent to roughly 8.1 MMTOE. Total biofuels, ethanol, and biodiesel each show the inverted-U separately, with biodiesel showing more context-dependence in the middle quantiles. The quantile estimates show that the inflection occurs at lower consumption levels in higher-emission contexts. This pattern is consistent with stronger marginal displacement of fossil fuels in transport-intensive economies. A robustness check using total refined petroleum consumption from EIA International Energy Statistics as an alternative dependent variable preserves the inverted-U, with a turning point of 2.37. Brazil is the only country whose panel mean sits above the threshold, and its trajectory illustrates how sustained mandates, flex-fuel adoption, and distribution networks have coincided with lower transport emissions. The findings support stage-specific policy design. Gradual blending mandates and supply-chain investment fit early-adoption settings. Mature transport systems need accelerated rollout of advanced biofuels and complementary electrification.

Labor Participation and Renewable Adoption Across Developing Countries: Identification and Mechanisms (Under Review at Review of Development Economics )

Co-authored with Ankit Singh Kharwar

Abstract: This paper examines how labor force participation influences the energy transition in developing economies, focusing on the shift from fossil fuels to renewable energy. Using an unbalanced panel of 70 countries from 2002–2021, we estimate fixed-effects and two-step GMM models with Driscoll–Kraay standard error to address heterogeneity, cross-sectional dependence, and endogeneity. The results show that higher labor force participation significantly reduces fossil fuel consumption and increases renewable energy uptake. Mediation analysis identifies regulatory quality as a channel through which labor participation promotes renewables, while moderation tests show that government effectiveness and rule of law amplify this effect. Robustness checks confirm the causal interpretation. These findings highlight labor force dynamics as an underexplored determinant of national energy portfolios. Policy implications point to labor market reforms, skills upgrading, and governance improvements as levers to accelerate renewable adoption in developing countries.

Fiscal Space and Environmental Management: Enabling Clean Energy Investment in Developing Countries (Work in Progress)

Abstract: While the financing gap for renewable energy in developing countries is widely acknowledged, the role of fiscal space in shaping access to international finance for clean energy remains underexplored. Existing studies have examined financial development, the role of green finance in the energy transition, and climate-related fiscal tools, but none have empirically tested how the fiscal position of a country influences its ability to attract international finance for clean energy. This study addresses this gap by investigating whether fiscal space, proxied by net lending/borrowing, affects the level of international finance received for clean energy. Using panel data from 32 developing countries during the period 2000-2021, the analysis uses fixed effects and IV-GMM estimates with Driscoll-Kraay standard errors to control for endogeneity and cross-sectional dependence. The results reveal a positive relationship between fiscal space and international finance for clean energy. Countries with a lower GDP per capita receive more support, whereas renewable energy consumption does not show a significant effect. These findings suggest that stronger fiscal positions may improve donor confidence and signal investor readiness. Since international clean energy finance plays a critical role in scaling low-carbon technologies, these results highlight fiscal space as a key enabling factor in environmental management. Improved fiscal capacity allows governments to plan and implement clean energy strategies more effectively, supporting broader SDG objectives, particularly SDG 7 (affordable and clean energy) and SDG 13 (climate action). Thus, improving fiscal management could be an important strategy for developing countries to access greater international support for clean energy. Thus, improving fiscal management could be an important strategy for developing countries to access greater international support for clean energy.