---
_id: '67256'
abstract:
- lang: eng
  text: "<jats:title>Abstract</jats:title>\r\n                  <jats:p>Although prices
    for renewable energy technologies have recently declined, many low-income countries
    still face barriers to deployment. The energy supply for their growing economies
    largely originates from the burning of fossil fuels. To avoid accelerating global
    greenhouse gas emissions, it is crucial that low-income countries enter a low-carbon
    growth path through the large-scale deployment of renewable energy. This is particularly
    relevant in countries that import fossil energy resources from global markets,
    where renewable energy deployment could be a tool for achieving independence and
    economic development. It can be beneficial in the short-run, for low-income countries
    with limited access to finance to rely on existing energy infrastructure. However,
    investment in renewable energy provides a long-run solution to preventing carbon
    lock-in by expanding existing infrastructure, such as pipelines or refineries.
    Therefore, we develop a theoretical model for long-run economic growth in import-dependent
    low-income countries. To produce renewable energy, a country must either attract
    international climate finance funds or substitute for other investments in the
    domestic economy to build a renewable energy capital stock. The results imply
    that sufficient and stable access to climate finance funds to transition to renewable
    energy accelerates long-run economic growth and welfare. Conversely, when investments
    in the energy transition crowds-out investment from other productive sectors in
    the economy, financing the energy transition can lead to income losses between
    15 and 20% in the short- to medium-run. However, the energy transition does stimulate
    economic growth and welfare with an optimal allocation of capital in the long
    run. Furthermore, insufficient access to climate finance leads to rebound effects,
    accelerating demand for fossil energy and carbon emissions.</jats:p>"
article_number: '159'
author:
- first_name: Amin
  full_name: Kassab, Amin
  id: '98377'
  last_name: Kassab
- first_name: Thomas
  full_name: Gries, Thomas
  id: '186'
  last_name: Gries
citation:
  ama: 'Kassab A, Gries T. Energy transition and economic growth in low-income countries:
    the role of climate finance. <i>Financial Innovation</i>. 2026;12(1). doi:<a href="https://doi.org/10.1186/s40854-026-00963-4">10.1186/s40854-026-00963-4</a>'
  apa: 'Kassab, A., &#38; Gries, T. (2026). Energy transition and economic growth
    in low-income countries: the role of climate finance. <i>Financial Innovation</i>,
    <i>12</i>(1), Article 159. <a href="https://doi.org/10.1186/s40854-026-00963-4">https://doi.org/10.1186/s40854-026-00963-4</a>'
  bibtex: '@article{Kassab_Gries_2026, title={Energy transition and economic growth
    in low-income countries: the role of climate finance}, volume={12}, DOI={<a href="https://doi.org/10.1186/s40854-026-00963-4">10.1186/s40854-026-00963-4</a>},
    number={1159}, journal={Financial Innovation}, publisher={Springer Science and
    Business Media LLC}, author={Kassab, Amin and Gries, Thomas}, year={2026} }'
  chicago: 'Kassab, Amin, and Thomas Gries. “Energy Transition and Economic Growth
    in Low-Income Countries: The Role of Climate Finance.” <i>Financial Innovation</i>
    12, no. 1 (2026). <a href="https://doi.org/10.1186/s40854-026-00963-4">https://doi.org/10.1186/s40854-026-00963-4</a>.'
  ieee: 'A. Kassab and T. Gries, “Energy transition and economic growth in low-income
    countries: the role of climate finance,” <i>Financial Innovation</i>, vol. 12,
    no. 1, Art. no. 159, 2026, doi: <a href="https://doi.org/10.1186/s40854-026-00963-4">10.1186/s40854-026-00963-4</a>.'
  mla: 'Kassab, Amin, and Thomas Gries. “Energy Transition and Economic Growth in
    Low-Income Countries: The Role of Climate Finance.” <i>Financial Innovation</i>,
    vol. 12, no. 1, 159, Springer Science and Business Media LLC, 2026, doi:<a href="https://doi.org/10.1186/s40854-026-00963-4">10.1186/s40854-026-00963-4</a>.'
  short: A. Kassab, T. Gries, Financial Innovation 12 (2026).
date_created: 2026-09-24T09:23:03Z
date_updated: 2026-09-24T10:21:12Z
department:
- _id: '200'
- _id: '202'
doi: 10.1186/s40854-026-00963-4
intvolume: '        12'
issue: '1'
language:
- iso: eng
publication: Financial Innovation
publication_identifier:
  issn:
  - 2199-4730
publication_status: published
publisher: Springer Science and Business Media LLC
status: public
title: 'Energy transition and economic growth in low-income countries: the role of
  climate finance'
type: journal_article
user_id: '98377'
volume: 12
year: '2026'
...