[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/100087.html
   My bibliography  Save this paper

The significance of renewable energy use for economic output and environmental protection: Evidence from the next 11 developing economies

Author

Listed:
  • Paramati, Sudharshan Reddy
  • Sinha, Avik
  • Dogan, Eyup
Abstract
Increasing economic activities in developing economies are raising demand for energy which is mainly sourced from conventional sources. The consumption of more conventional energy sources will have a significant negative impact on the environment. Therefore, the attention of the policy makers, recently, has shifted towards the promotion of renewable energy generation and uses across the economic activities to ensure the low carbon economy. Given the recent scenario, in this paper, we aim to examine the role of renewable energy consumption on the economic output and CO2 emissions of the next fastest developing economies of the world. The study makes use of annual data from 1990 to 2012 and employs several robust panel econometric models. The empirical findings confirm the significant long-run association among the variables. Similarly, the results show that the renewable energy consumption positively contributes to economic output and has an adverse effect on the CO2 emissions. Given our findings, we suggest the policy makers of those economies to initiate further effective policies to promote more renewable energy generation and uses across the economic activities to ensure sustainable economic development.

Suggested Citation

  • Paramati, Sudharshan Reddy & Sinha, Avik & Dogan, Eyup, 2017. "The significance of renewable energy use for economic output and environmental protection: Evidence from the next 11 developing economies," MPRA Paper 100087, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:100087
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/100087/1/MPRA_paper_100087.pdf
    File Function: original version
    Download Restriction: no
    File URL: https://mpra.ub.uni-muenchen.de/100133/9/MPRA_paper_100133.pdf
    File Function: revised version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Shahbaz, Muhammad & Mahalik, Mantu Kumar & Shah, Syed Hasanat & Sato, João Ricardo, 2016. "Time-varying analysis of CO2 emissions, energy consumption, and economic growth nexus: Statistical experience in next 11 countries," Energy Policy, Elsevier, vol. 98(C), pages 33-48.
    2. Sinha, Avik & Bhattacharya, Joysankar, 2016. "Environmental Kuznets curve estimation for NO2 emission: A case of Indian cities," MPRA Paper 100179, University Library of Munich, Germany, revised 2016.
    3. Dumitrescu, Elena-Ivona & Hurlin, Christophe, 2012. "Testing for Granger non-causality in heterogeneous panels," Economic Modelling, Elsevier, vol. 29(4), pages 1450-1460.
    4. M. Hashem Pesaran, 2021. "General diagnostic tests for cross-sectional dependence in panels," Empirical Economics, Springer, vol. 60(1), pages 13-50, January.
    5. Susana Silva & Isabel Soares & Carlos Pinho, 2011. "The impact of renewable energy sources on economic growth and CO2 emissions - a SVAR approach," FEP Working Papers 407, Universidade do Porto, Faculdade de Economia do Porto.
    6. Ozturk, Ilhan & Bilgili, Faik, 2015. "Economic growth and biomass consumption nexus: Dynamic panel analysis for Sub-Sahara African countries," Applied Energy, Elsevier, vol. 137(C), pages 110-116.
    7. Peter Pedroni, 2000. "Fully Modified OLS for Heterogeneous Cointegrated Panels," Department of Economics Working Papers 2000-03, Department of Economics, Williams College.
    8. Im, Kyung So & Pesaran, M. Hashem & Shin, Yongcheol, 2003. "Testing for unit roots in heterogeneous panels," Journal of Econometrics, Elsevier, vol. 115(1), pages 53-74, July.
    9. World Bank, 2012. "World Development Indicators 2012," World Bank Publications - Books, The World Bank Group, number 6014.
    10. Raskin, Paul D., 1995. "Methods for estimating the population contribution to environmental change," Ecological Economics, Elsevier, vol. 15(3), pages 225-233, December.
    11. repec:bla:obuest:v:61:y:1999:i:0:p:631-52 is not listed on IDEAS
    12. Alper, Aslan & Oguz, Ocal, 2016. "The role of renewable energy consumption in economic growth: Evidence from asymmetric causality," Renewable and Sustainable Energy Reviews, Elsevier, vol. 60(C), pages 953-959.
    13. Susana Silva & Isabel Soares & Carlos Pinho, 2012. "The Impact of Renewable Energy Sources on Economic Growth and CO2 Emissions - a SVAR approach," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 133-144.
    14. Sahbi Farhani, 2013. "Renewable Energy Consumption, Economic Growth and Co2 Emissions: Evidence from Selected Mena Countries," Energy Economics Letters, Asian Economic and Social Society, vol. 1(2), pages 24-41.
    15. Menyah, Kojo & Wolde-Rufael, Yemane, 2010. "CO2 emissions, nuclear energy, renewable energy and economic growth in the US," Energy Policy, Elsevier, vol. 38(6), pages 2911-2915, June.
    16. Aviral Kumar Tiwari, 2011. "A structural VAR analysis of renewable energy consumption, real GDP and CO2 emissions: Evidence from India," Economics Bulletin, AccessEcon, vol. 31(2), pages 1793-1806.
    17. Granger, C W J, 1969. "Investigating Causal Relations by Econometric Models and Cross-Spectral Methods," Econometrica, Econometric Society, vol. 37(3), pages 424-438, July.
    18. Johansen, Soren, 1991. "Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models," Econometrica, Econometric Society, vol. 59(6), pages 1551-1580, November.
    19. Dogan, Eyup, 2016. "Analyzing the linkage between renewable and non-renewable energy consumption and economic growth by considering structural break in time-series data," Renewable Energy, Elsevier, vol. 99(C), pages 1126-1136.
    20. Peter Pedroni, 2001. "Purchasing Power Parity Tests In Cointegrated Panels," The Review of Economics and Statistics, MIT Press, vol. 83(4), pages 727-731, November.
    21. Zeb, Raheel & Salar, Laleena & Awan, Usama & Zaman, Khalid & Shahbaz, Muhammad, 2014. "Causal links between renewable energy, environmental degradation and economic growth in selected SAARC countries: Progress towards green economy," Renewable Energy, Elsevier, vol. 71(C), pages 123-132.
    22. Apergis, Nicholas & Payne, James E., 2010. "Renewable energy consumption and growth in Eurasia," Energy Economics, Elsevier, vol. 32(6), pages 1392-1397, November.
    23. Paramati, Sudharshan Reddy & Ummalla, Mallesh & Apergis, Nicholas, 2016. "The effect of foreign direct investment and stock market growth on clean energy use across a panel of emerging market economies," Energy Economics, Elsevier, vol. 56(C), pages 29-41.
    24. Md. Samsul Alam & Sudharshan Reddy Paramati & Muhammad Shahbaz & Mita Bhattacharya, 2017. "Natural gas, trade and sustainable growth: empirical evidence from the top gas consumers of the developing world," Applied Economics, Taylor & Francis Journals, vol. 49(7), pages 635-649, February.
    25. Al-mulali, Usama & Fereidouni, Hassan Gholipour & Lee, Janice Ym & Sab, Che Normee Binti Che, 2013. "Examining the bi-directional long run relationship between renewable energy consumption and GDP growth," Renewable and Sustainable Energy Reviews, Elsevier, vol. 22(C), pages 209-222.
    26. Sadorsky, Perry, 2009. "Renewable energy consumption and income in emerging economies," Energy Policy, Elsevier, vol. 37(10), pages 4021-4028, October.
    27. Pao, Hsiao-Tien & Fu, Hsin-Chia, 2013. "The causal relationship between energy resources and economic growth in Brazil," Energy Policy, Elsevier, vol. 61(C), pages 793-801.
    28. Sahbi Farhani & Jaleleddine Ben Rejeb, 2012. "Energy Consumption, Economic Growth and CO2 Emissions: Evidence from Panel Data for MENA Region," International Journal of Energy Economics and Policy, Econjournals, vol. 2(2), pages 71-81.
    29. Sinha, Avik & Bhattacharya, Joysankar, 2017. "Estimation of environmental Kuznets curve for SO2 emission: A case of Indian cities," MPRA Paper 100009, University Library of Munich, Germany.
    30. Apergis, Nicholas & Payne, James E., 2010. "Renewable energy consumption and economic growth: Evidence from a panel of OECD countries," Energy Policy, Elsevier, vol. 38(1), pages 656-660, January.
    31. Fang, Yiping, 2011. "Economic welfare impacts from renewable energy consumption: The China experience," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(9), pages 5120-5128.
    32. Paramati, Sudharshan Reddy & Apergis, Nicholas & Ummalla, Mallesh, 2017. "Financing clean energy projects through domestic and foreign capital: The role of political cooperation among the EU, the G20 and OECD countries," Energy Economics, Elsevier, vol. 61(C), pages 62-71.
    33. Alam, Md. Samsul & Paramati, Sudharshan Reddy, 2016. "The impact of tourism on income inequality in developing economies: Does Kuznets curve hypothesis exist?," Annals of Tourism Research, Elsevier, vol. 61(C), pages 111-126.
    34. Sebri, Maamar & Ben-Salha, Ousama, 2014. "On the causal dynamics between economic growth, renewable energy consumption, CO2 emissions and trade openness: Fresh evidence from BRICS countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 39(C), pages 14-23.
    35. Tugcu, Can Tansel & Ozturk, Ilhan & Aslan, Alper, 2012. "Renewable and non-renewable energy consumption and economic growth relationship revisited: Evidence from G7 countries," Energy Economics, Elsevier, vol. 34(6), pages 1942-1950.
    36. repec:ers:journl:v:xv:y:2012:i:sie:p:133-144 is not listed on IDEAS
    37. Aslan Alper & Gozbasi Onur, 2016. "Environmental Kuznets curve hypothesis for sub-elements of the carbon emissions in China," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 82(2), pages 1327-1340, June.
    38. Nicholas Apergis & James E. Payne, 2014. "The causal dynamics between renewable energy, real GDP, emissions and oil prices: evidence from OECD countries," Applied Economics, Taylor & Francis Journals, vol. 46(36), pages 4519-4525, December.
    39. Yıldırım, Ertugrul & Sukruoglu, Deniz & Aslan, Alper, 2014. "Energy consumption and economic growth in the next 11 countries: The bootstrapped autoregressive metric causality approach," Energy Economics, Elsevier, vol. 44(C), pages 14-21.
    40. Bhattacharya, Mita & Paramati, Sudharshan Reddy & Ozturk, Ilhan & Bhattacharya, Sankar, 2016. "The effect of renewable energy consumption on economic growth: Evidence from top 38 countries," Applied Energy, Elsevier, vol. 162(C), pages 733-741.
    41. Richard York & Eugene A. Rosa & Thomas Dietz, 2002. "Bridging Environmental Science with Environmental Policy: Plasticity of Population, Affluence, and Technology," Social Science Quarterly, Southwestern Social Science Association, vol. 83(1), pages 18-34, March.
    42. Alam & Paramati, 2015. "Do oil consumption and economic growth intensify environmental degradation? Evidence from developing economies," Applied Economics, Taylor & Francis Journals, vol. 47(48), pages 5186-5203, October.
    43. Dogan, Eyup, 2015. "The relationship between economic growth and electricity consumption from renewable and non-renewable sources: A study of Turkey," Renewable and Sustainable Energy Reviews, Elsevier, vol. 52(C), pages 534-546.
    44. G. S. Maddala & Shaowen Wu, 1999. "A Comparative Study of Unit Root Tests with Panel Data and a New Simple Test," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(S1), pages 631-652, November.
    45. Chien, Taichen & Hu, Jin-Li, 2007. "Renewable energy and macroeconomic efficiency of OECD and non-OECD economies," Energy Policy, Elsevier, vol. 35(7), pages 3606-3615, July.
    46. Dogan, Eyup & Seker, Fahri, 2016. "Determinants of CO2 emissions in the European Union: The role of renewable and non-renewable energy," Renewable Energy, Elsevier, vol. 94(C), pages 429-439.
    47. Levin, Andrew & Lin, Chien-Fu & James Chu, Chia-Shang, 2002. "Unit root tests in panel data: asymptotic and finite-sample properties," Journal of Econometrics, Elsevier, vol. 108(1), pages 1-24, May.
    48. Apergis, Nicholas & Payne, James E. & Menyah, Kojo & Wolde-Rufael, Yemane, 2010. "On the causal dynamics between emissions, nuclear energy, renewable energy, and economic growth," Ecological Economics, Elsevier, vol. 69(11), pages 2255-2260, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Shahbaz, Muhammad & Raghutla, Chandrashekar & Chittedi, Krishna Reddy & Jiao, Zhilun & Vo, Xuan Vinh, 2020. "The effect of renewable energy consumption on economic growth: Evidence from the renewable energy country attractive index," Energy, Elsevier, vol. 207(C).
    2. Kahia, Montassar & Aïssa, Mohamed Safouane Ben & Lanouar, Charfeddine, 2017. "Renewable and non-renewable energy use - economic growth nexus: The case of MENA Net Oil Importing Countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 71(C), pages 127-140.
    3. Adewuyi, Adeolu O. & Awodumi, Olabanji B., 2017. "Biomass energy consumption, economic growth and carbon emissions: Fresh evidence from West Africa using a simultaneous equation model," Energy, Elsevier, vol. 119(C), pages 453-471.
    4. Paramati, Sudharshan Reddy & Mo, Di & Gupta, Rakesh, 2017. "The effects of stock market growth and renewable energy use on CO2 emissions: Evidence from G20 countries," Energy Economics, Elsevier, vol. 66(C), pages 360-371.
    5. Bakry, Walid & Mallik, Girijasankar & Nghiem, Xuan-Hoa & Sinha, Avik & Vo, Xuan Vinh, 2023. "Is green finance really “green”? Examining the long-run relationship between green finance, renewable energy and environmental performance in developing countries," Renewable Energy, Elsevier, vol. 208(C), pages 341-355.
    6. Daniel Ştefan Armeanu & Georgeta Vintilă & Ştefan Cristian Gherghina, 2017. "Does Renewable Energy Drive Sustainable Economic Growth? Multivariate Panel Data Evidence for EU-28 Countries," Energies, MDPI, vol. 10(3), pages 1-21, March.
    7. Koçak, Emrah & Şarkgüneşi, Aykut, 2017. "The renewable energy and economic growth nexus in Black Sea and Balkan countries," Energy Policy, Elsevier, vol. 100(C), pages 51-57.
    8. Dogan, Eyup & Inglesi-Lotz, Roula, 2017. "Analyzing the effects of real income and biomass energy consumption on carbon dioxide (CO2) emissions: Empirical evidence from the panel of biomass-consuming countries," Energy, Elsevier, vol. 138(C), pages 721-727.
    9. Dogan, Eyup & Seker, Fahri, 2016. "Determinants of CO2 emissions in the European Union: The role of renewable and non-renewable energy," Renewable Energy, Elsevier, vol. 94(C), pages 429-439.
    10. Rahman, Mohammad Mafizur & Velayutham, Eswaran, 2020. "Renewable and non-renewable energy consumption-economic growth nexus: New evidence from South Asia," Renewable Energy, Elsevier, vol. 147(P1), pages 399-408.
    11. Adewuyi, Adeolu O. & Awodumi, Olabanji B., 2017. "Renewable and non-renewable energy-growth-emissions linkages: Review of emerging trends with policy implications," Renewable and Sustainable Energy Reviews, Elsevier, vol. 69(C), pages 275-291.
    12. Qamruzzaman, Md & Jianguo, Wei, 2020. "The asymmetric relationship between financial development, trade openness, foreign capital flows, and renewable energy consumption: Fresh evidence from panel NARDL investigation," Renewable Energy, Elsevier, vol. 159(C), pages 827-842.
    13. Moutinho, Victor & Robaina, Margarita, 2016. "Is the share of renewable energy sources determining the CO2 kWh and income relation in electricity generation?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 65(C), pages 902-914.
    14. Bhattacharya, Mita & Paramati, Sudharshan Reddy & Ozturk, Ilhan & Bhattacharya, Sankar, 2016. "The effect of renewable energy consumption on economic growth: Evidence from top 38 countries," Applied Energy, Elsevier, vol. 162(C), pages 733-741.
    15. Radmehr, Riza & Henneberry, Shida Rastegari & Shayanmehr, Samira, 2021. "Renewable Energy Consumption, CO2 Emissions, and Economic Growth Nexus: A Simultaneity Spatial Modeling Analysis of EU Countries," Structural Change and Economic Dynamics, Elsevier, vol. 57(C), pages 13-27.
    16. Olimpia Neagu & Mircea Constantin Teodoru, 2019. "The Relationship between Economic Complexity, Energy Consumption Structure and Greenhouse Gas Emission: Heterogeneous Panel Evidence from the EU Countries," Sustainability, MDPI, vol. 11(2), pages 1-29, January.
    17. Sharif, Arshian & Raza, Syed Ali & Ozturk, Ilhan & Afshan, Sahar, 2019. "The dynamic relationship of renewable and nonrenewable energy consumption with carbon emission: A global study with the application of heterogeneous panel estimations," Renewable Energy, Elsevier, vol. 133(C), pages 685-691.
    18. Seong-Hoon Lee & Yonghun Jung, 2018. "Causal dynamics between renewable energy consumption and economic growth in South Korea: Empirical analysis and policy implications," Energy & Environment, , vol. 29(7), pages 1298-1315, November.
    19. Kahia, Montassar & Ben Aissa, Mohamed Safouane, 2014. "Renewable and non-renewable energy consumption and economic growth: Evidence from MENA Net Oil Exporting Countries," MPRA Paper 80776, University Library of Munich, Germany.
    20. Zafar, Muhammad Wasif & Shahbaz, Muhammad & Hou, Fujun & Sinha, Avik, 2018. "¬¬¬¬¬¬From Nonrenewable to Renewable Energy and Its Impact on Economic Growth: Silver Line of Research & Development Expenditures in APEC Countries," MPRA Paper 90611, University Library of Munich, Germany, revised 10 Dec 2018.

    More about this item

    Keywords

    Renewable energy consumption; Sustainable economic development; CO2 emissions; Developing economies;
    All these keywords.

    JEL classification:

    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:100087. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.