Nature and climate change effects on economic growth: an LSTM experiment on renewable energy resources

Global energy demand increases overtime, especially in emerging market economies, producing potential negative environmental impacts, particularly on the long term, on nature and climate changes. Promoting renewables is a robust policy action in world energy-based economies. This study examines if an increase in renewables production has a positive effect on the Brazilian economy, partially offsetting the SARS-CoV2 outbreak recession. Using data on Brazilian economy, we test the contribution of renewables on the economy via a ML architecture (through a LSTM model). Empirical findings show that an ever-greater use of renewables may sustain the economic growth recovery, generating a better performing GDP acceleration vs. other energy variables.

Automated summary

Global energy demand is increasing over time, especially in emerging market economies, and promoting renewables is a strong policy action in the world's energy-based economies. The study found that an increase in renewables production may sustain economic growth recovery, generating a better performing GDP acceleration compared to other energy variables.