Financial development, renewable energy, resource depletion, and energy security risk in D-8 countries

This study investigates the dynamic relationship among financial development, renewable energy consumption, natural resource depletion, and energy security risk in D-8 countries (Bangladesh, Egypt, Indonesia, Iran, Malaysia, Nigeria, Pakistan, and Turkey), a strategically important group of developing economies facing growing energy and sustainability challenges. Using the Panel Vector Autoregression (Panel-VAR) approach on first-differenced variables, the study examines short-run dynamic interactions and causal relationships among these variables. The findings indicate that shocks to natural resource depletion initially increase energy security risk, although this effect gradually declines over time. Renewable energy consumption significantly reduces energy security risk, highlighting its critical role in decreasing dependence on fossil fuels and strengthening energy resilience. Financial development initially contributes to lower energy security risk by supporting investments in renewable energy and energy infrastructure; however, its long-term effect becomes positive, suggesting that expanded financial activity may also increase energy demand and supply pressures. These findings reveal the complex and dynamic nature of energy security determinants in D-8 countries. The study provides important policy implications by emphasizing the need to promote renewable energy investment, strengthen sustainable financial systems, and reduce dependence on non-renewable resources to improve energy security and support climate resilience.