How environmental policy stringency affects renewable energy investment? Implications for green investment horizons.

Renewable energy has many benefits, but the most important is its ability to reduce our carbon emissions and help protect the environment. This study looks into the nonlinear effects of environmental policy stringency (EPS) on renewable energy investment in BRICS. To probe the short- and long-term connection, we exploited the nonlinear panel QARDL framework. According to the analysis's results, renewable energy investment rises at nearly all quantiles in response to both short- and long-run positive shocks in EPS. The long-run negative shocks in EPS reduce renewable energy investments at lower and medium quantiles only, whereas the short-term negative shocks in EPS significantly reduce renewable energy investment at most quantiles. At all quantiles, the short and long-run Wald test validates the dissimilar effect of EPS on renewable energy investment. Consequently, policymakers should distinguish between positive and negative shocks in the EPS when considering the effect of EPS on renewable energy investment. • The study investigates the relationship between environmental policy stringency and renewable energy investment in BRICS countries. • The study utilizes a nonlinear panel QARDL framework to analyze the short- and long-term effects of environmental policy stringency on renewable energy investment. • The results show that renewable energy investment increases at all quantiles in response to positive shocks in environmental policy stringency, both in the short and long run. • Long-run negative shocks in environmental policy stringency reduce renewable energy investments at lower and medium quantiles only. • Short-term negative shocks in environmental policy stringency significantly reduce renewable energy investment at most quantiles. [ABSTRACT FROM AUTHOR]