BU SHA Research Spotlight: New Study Identifies Carbon Price Threshold for Renewable Energy Growth
Apostolos Ampountolas, Associate Professor at Boston University School of Hospitality Administration, and Yagmur Saglam have published new research in Research in International Business and Finance examining how carbon pricing and green finance work together to accelerate renewable energy adoption across the European Union.
Analyzing 24 years of EU-27 data (2000–2023), the study finds that green finance becomes significantly more effective once carbon prices exceed approximately €32–35 per tonne of CO₂. Below this threshold, carbon pricing has little measurable impact on renewable energy growth, while above it, its influence becomes both substantial and statistically significant.
The researchers also show that carbon pricing and green bonds complement one another rather than compete. Carbon pricing creates immediate market incentives for clean energy investment, while green bonds provide longer-term financing that supports the development of renewable energy projects. The findings offer an evidence-based benchmark for policymakers and investors seeking to strengthen climate policy and accelerate the transition to a more sustainable energy future.
