The effect of renewable energy consumption on economic growth: Evidence from the renewable energy country attractive index

Abstract

The use of non-renewable resources emits a high quantity of CO 2 into environment, leading to a greenhouse effect, to reduce CO 2 emissions all countries have shifted to use renewable energy sources. Therefore, this study re-examines the effect of renewable energy consumption on economic growth across 38 renewable-energy-consuming countries from 1990 to 2018. The dynamic ordinary least squares (DOLS), fully modified ordinary least squares (FMOLS) and heterogeneous non-causality approaches are applied. The empirical analysis confirms the presence of a long-run relationship between renewable energy consumption and economic growth. Further, we noted that renewable energy, nonrenewable energy, capital and labor have positive impact on economic growth, particularly, renewable energy consumption has a positive impact on economic growth for 58% of the sample countries. The empirical results suggest that international cooperation agencies, energy organizers, governments, and associated bodies must act together in increasing renewable energy investment for low carbon growth in most of these economies.

The Moderating Effects of Institutional Qualities and Energy Use on the Economic Output

“…The findings show that energy use is associated with a reduction in economic output. This is consistent with Shahbaz et al (2020), who argue that energy consumption will not always determine economic growth. Economically, a 1% increase in energy use will lead to a drop in economic growth by 0.00380%.…”

“…That's why countries like Canada, France, Spain, India, Turkey, the United Kingdom, and Norway continue to depicted negative economic growth. This is expected since these countries use an insignificant renewable energy level in running economic activities (Shahbaz et al, 2020).…”

“…First, some researchers have conclude that energy consumption could be pivotal for economic growth and output (Akinlo, 2008;Dogan et al, 2020;Wang and Wang, 2020;Chen et al, 2020). On the other hand, other scholars (Liu et al, 2020;Shahbaz et al, 2020) pointed out a negative relationship between energy use and economic growth or outputs. Therefore, this paper aims at providing a more convincing argument.…”

The dynamic links among energy consumption, tourism growth, and the ecological footprint: the role of environmental quality in 38 IEA countries

“…Using panel quantile regression analysis, they explained the positive effects of renewable energy consumption on the economic growth of countries in the lower and middle-lower quantiles and adverse association with the middle, high middle, and high quantiles. Shahbaz et al ( 2020 ) studied the effects of renewable energy consumption on the economic growth of 38 renewable energy–consuming countries from 1990 to 2018. Using FMOLS and DOLS regression approaches, they confirmed that renewable energy consumption is positively associated with the countries’ economic growth.…”

Natural Dyes Extracted from Bioactive Components of Fruit Waste for Dye-Sensitized Solar Cell

“…Renewable energy becomes a crucial thing in preserving nature and the environment quality [1]. Besides, it has also been proven to improve economic growth because of its lower cost than non-renewable energy [2]. Sunlight is one of the renewable energy that doesn't cause environmental pollution and noise [3].…”