Journal
STRUCTURAL CHANGE AND ECONOMIC DYNAMICS
Volume 59, Issue -, Pages 330-341Publisher
ELSEVIER
DOI: 10.1016/j.strueco.2021.08.006
Keywords
Electricity consumption; Economic growth; Renewables; Cross-sectional dependence; CS-ARDL model; CS-DL model
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This study found a significant positive long-term relationship between renewable electricity consumption and economic growth, but no Granger causality was detected. It also identified per capita economic growth as a causal factor for total electricity consumption and fossil fuel based electricity consumption.
Renewable electricity is a pillar of the sustainability transition being pursued through climate and energy policy strategies, and the European Green Deal represents a potential investment plan for this new phase of development. Economic growth can be influenced by the expansion of renewable electricity consumption, but the nature of their relationship is ambiguous and depends on various economic and policy factors. This paper investigates the long-run relationship between renewable electricity consumption and economic growth in selected countries over the period 1971-2015 using econometric panel data techniques that specifically address cross-country heterogeneity and cross-sectional dependence. Our findings suggest that, on average, there is a significant positive long-term relationship between renewable electricity consumption and economic growth, although Granger causality is not detected. Regarding causality, we do find per capita economic growth to be a causal factor for total electricity consumption and fossil fuel based electricity consumption. (c) 2021 Elsevier B.V. All rights reserved.
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