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This paper fills a gap in the macroeconomic literature on renewable sources of energy. It offers a definition of green investment and analyzes the trends and determinants of this investment over the last decade for 35 advanced and emerging countries. We use a new multi-country historical dataset and find that green investment has become a key driver of the energy sector and that its rapid growth is now mostly driven by China. Our econometric results suggest that green investment is boosted by economic growth, a sound financial system conducive to low interest rates, and high fuel prices. We also find that some policy interventions, such as the introduction of carbon pricing schemes, or "feed-in-tariffs," which require use of "green" energy, have a positive and significant impact on green investment. Other interventions, such as biofuel support, do not appear to be associated with higher green investment.

Renewable energy sources --- Investments --- Investing --- Investment management --- Portfolio --- Finance --- Disinvestment --- Loans --- Saving and investment --- Speculation --- Alternate energy sources --- Alternative energy sources --- Energy sources, Renewable --- Sustainable energy sources --- Power resources --- Renewable natural resources --- Agriculture and energy --- Econometric models. --- Environmental Conservation and Protection --- Natural Resources --- Energy --- Renewable Resources and Conservation: Issues in International Trade --- Energy: General --- Environmental Economics: General --- Alternative Energy Sources --- Renewable Resources and Conservation: General --- Nonrenewable Resources and Conservation: General --- Climate --- Natural Disasters and Their Management --- Global Warming --- Innovation --- Research and Development --- Technological Change --- Intellectual Property Rights: General --- Environmental management --- Climate change --- Technology --- general issues --- Renewable energy --- Renewable resources --- Non-renewable resources --- Greenhouse gas emissions --- Natural resources --- Greenhouse gases --- China, People's Republic of --- General issues