Does climate vulnerability promote green investment under energy supply restriction?

This research investigates the impact of climate vulnerability on green investment using panel data of 107 countries over the period 1995–2019. We find that climate vulnerability reduces green investment in both climate change mitigation and climate change adaptation technologies. This finding holds up under a series of robustness tests and after taking into consideration the time lag effect, cross-sectional dependence, and endogenous problems. We further present that it is socioeconomic-related climate vulnerability that hinders green investment, whereas physical vulnerability does the opposite. Analyses of moderating channels show that the negative impact of climate vulnerability on green investment is more pronounced in countries with lower levels of adaptation readiness, economic development, and technical innovation, and higher levels of energy supply restriction.