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The Effect of Renewable Energy Consumption on Economic Growth: Evidence from the Renewable Energy Country Attractive Index

Muhammad Shahbaz, Chandrashekar Raghutla (), Krishna Chittedi, Zhilun Jiao and Xuan Vinh Vo

MPRA Paper from University Library of Munich, Germany

Abstract: The use of non-renewable resources emits a high quantity of CO2 into environment, leading to a greenhouse effect, to reduce CO2 emissions all countries have shifted to use renewable energy sources. Therefore, this study re-examines the effect of renewable energy consumption on economic growth across 38 renewable-energy-consuming countries from 1990 to 2018. The dynamic ordinary least squares (DOLS), fully modified ordinary least squares (FMOLS) and heterogeneous non-causality approaches are applied. The empirical analysis confirms the presence of a long-run relationship between renewable energy consumption and economic growth. Further, we noted that renewable energy, non-renewable energy, capital and labor have positive impact on economic growth, particularly, renewable energy consumption has a positive impact on economic growth for 58% of the sample countries. The empirical results suggest that international cooperation agencies, energy organizers, governments, and associated bodies must act together in increasing renewable energy investment for low carbon growth in most of these economies.

Keywords: Renewable Energy; Economic Growth; Renewable Energy Country Attractiveness Index (search for similar items in EconPapers)
JEL-codes: Q5 (search for similar items in EconPapers)
Date: 2020-06-03, Revised 2020-06-15
New Economics Papers: this item is included in nep-ene and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (133)

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Journal Article: The effect of renewable energy consumption on economic growth: Evidence from the renewable energy country attractive index (2020) Downloads
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