Renewable energy consumption and economic growth: a note reassessing panel data results

We contribute to the renewable energy consumption-income (and growth) nexus literature by performing an empirical study on a worldwide panel database that, depending on data availability, covers between 146 and 161 countries for the period of 1960 to 2019 (59 years), enabling much more observations than most of the literature on the subject. The empirical methodology used accounts for cross-country dependency, heterogeneity and common effects amongst countries using a parsimonious specification that controls for traditional sources of income differences as well as institutional features of the countries. We also run an error correction model to check the impact of the share of the renewables on the income on the long run. Our results give support to the use of models that control for cross dependence giving a more accurate depiction of the renewable energy consumption-income nexus, showing either a negative or nonsignificant influence of the share of renewable energies consumption in the short run and a possible positive effect in the long run.

Automated summary

The study contributes to the literature on the relationship between renewable energy consumption and income by conducting an empirical analysis on a global panel database. The results show that in the short run, the share of renewable energy consumption has either a negative or nonsignificant influence on income, but in the long run, there may be a positive effect.