The effect of renewable energy consumption on economic growth: Evidence from top 38 countries. (15th January 2016)

• Record Type: Journal Article
• Authors: Bhattacharya, Mita; Paramati, Sudharshan Reddy; Ozturk, Ilhan; Bhattacharya, Sankar
• Is Part Of: Applied energy. Volume 162(2016)
• Page Start: 733
• Page End: 741
• Publication Date: 2016-01-15
• Subjects: Renewable energy -- GDP growth -- FMOLS -- Heterogeneous panel -- Renewable Energy Country Attractiveness Index -- Low-carbon economies; Power (Mechanics) -- Periodicals; Energy conservation -- Periodicals; Energy conversion -- Periodicals; 621.042
• DOI: 10.1016/j.apenergy.2015.10.104
• Languages: English
• ISSNs: 0306-2619

Abstract

Highlights: Deployment of renewables is essential for sustainable development. Top 38 countries are selected using the Renewable Energy Country Attractive Index. Long-run output elasticities estimated for each country. Analysis for both panel and individual countries. The message varies for future renewable deployment into the growth process. Abstract: This research aims to investigate the effects of renewable energy consumption on the economic growth of major renewable energy consuming countries in the world. Using the Renewable Energy Country Attractiveness Index developed by the Ernst & Young Global Limited, we choose 38 top renewable energy consuming countries to explain the growth process between 1991 and 2012. With panel estimation techniques, our findings establish cross-sectional dependence and heterogeneity across the countries. We confirm the evidence of long-run dynamics between economic growth, and traditional and energy-related inputs. Findings from long-run output elasticities indicate that renewable energy consumption has a significant positive impact on the economic output for 57% of our selected countries. For robustness, we also carried out time-series analyses of long-run output elasticities. Our findings suggest that governments, energy planners, international cooperation agencies and associated bodies must act together in increasing renewable energy investment for low carbon growth in most of these economies.