The effect of renewable energy consumption on economic growth: Evidence from top 38 countries

TY - JOUR

T1 - The effect of renewable energy consumption on economic growth

T2 - Evidence from top 38 countries

AU - Bhattacharya, Mita

AU - Paramati, Sudharshan Reddy

AU - Ozturk, Ilhan

AU - Bhattacharya, Sankar

PY - 2016/1/15

Y1 - 2016/1/15

N2 - 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.

AB - 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.

KW - FMOLS

KW - GDP growth

KW - Heterogeneous panel

KW - Low-carbon economies

KW - Renewable energy

KW - Renewable Energy Country Attractiveness Index

U2 - 10.1016/j.apenergy.2015.10.104

DO - 10.1016/j.apenergy.2015.10.104

M3 - Article

AN - SCOPUS:84946606035

SN - 0306-2619

VL - 162

SP - 733

EP - 741

JO - Applied Energy

JF - Applied Energy

ER -