The existing literature on renewable energy consumption and economic growth nexus produces mixed results as the effect of renewable energy consumption on economic growth can be either positive, negative or not significant. This paper examines the causal link between renewable energy use and economic growth by employing a threshold model using a 103-country sample in the 1995 to 2015 period. We find that the relationship between renewable energy consumption and economic growth depends on the amount of renewable energy used. Our results demonstrate that the effect of renewable energy consumption on economic growth is positive and significant if and only if developing countries or non-OECD countries surpass a certain threshold of renewable energy consumption. However, if developing countries use renewable energy below a given threshold level, the effect of renewable energy consumption on economic growth is negative. However, we also find that renewable energy consumption has no significant effect on economic growth in developed countries and a positive and significant effect on economic growth in OECD countries. The findings of this paper suggest that for developing countries to realize positive economic growth from their investment to renewable energy, they need to surpass a certain threshold of renewable energy consumption.

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This paper presents the development of the FEEM Sustainability Index (FEEM SI), a composite index including 19 different indicators grouped in the three classical pillars of sustainability -economic, social and environmental. We present the relevance of multi-attribute aggregation methodologies when dealing with such complex concepts and apply an aggregation methodology used for this case study: the Choquet integral operator. First, we normalize each sustainability indicator with the use of a benchmarking procedure with a smooth target of sustainability. We then develop an aggregation tree of sustainability criteria and a questionnaire to measure the values that experts attribute to individual sustainability criteria and their interaction. This survey suggests that a majority of experts consider sustainability criteria as complementary to each other. After combining the preferences of different experts to establish a consensus, we construct the FEEM SI using the Choquet integral aggregation procedure. The results for sustainability levels show that countries that are ranked at higher (lower) positions are those that have better (worse) outcomes in at least in two final pillars, respectively. Finally, we conduct a robustness analysis by repeating the aggregation procedure with different convex combinations of experts' preferences. The results indicate that, while sustainability levels of countries do vary with the expert preferences, countries' respective rankings remain mainly the same, irrespective of the combination of experts' preferences.