The impact of energy efficiency and renewable energy on GDP growth: new evidence from RALS-EG cointegration test and QARDL technique

Kadir, Musbau Omotola; Deka, Abraham; Özdeşer, Hüseyin; Seraj, Mehdi; Türüç, Fatma

doi:10.1007/s12053-023-10130-8

Cited by 17 publications

(11 citation statements)

References 81 publications

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“…In the second step, the Engle-Granger (EG) cointegration methodology introduced by Engle & Granger (1987) and the RALS-EG cointegration tests put forward by Lee et al (2015) are employed to determine the presence of a long-run co-integrating relationship between the variables. The RALS-ADF approach, a hybrid cointegration approach, extends the EG cointegration model with the RALS procedure (Doğanlar et al, 2021;Kadir et al, 2023).…”

Section: Methodsmentioning

confidence: 99%

“…Consequently, more recent production functions have included energy in their modelling framework to explain production dynamics (see, e.g., Lin & Ahmad, 2016a, 2016bZweifel et al, 2017;Khalid & Jalil, 2019;Kadir et al, 2023). Therefore, the most recent production functions have taken the form shown in Equation ( 10):…”

Section: Theoretical Frameworkmentioning

confidence: 99%

“…renewable energy consumption (REC) and non-renewable energy consumption (NREC). They have included these individual components in their production functions to estimate their separate impacts on aggregate output (see, for example, Lin & Ahmad, 2016a;Zweifel et al, 2017;Khalid & Jalil, 2019;Kadir et al, 2023). The need to differentiate between REC and NREC in the production functions arises from the adverse effects of NREC on environmental quality; consequently, a shift towards using REC has been advocated to mitigate these effects (Kadir et al, 2023).…”

Section: Theoretical Frameworkmentioning

confidence: 99%

“…Similarly, Kadir et al (2023) used the modified C-D production function to investigate the influence of energy efficiency on economic growth. Their results indicate that labour, capital, energy efficiency, renewable, and nonrenewable energy consumption positively influence production in seven emerging economies (E-7).…”

Section: Model Specificationmentioning

confidence: 99%

“…These contradictory findings have raised concerns among economists, policymakers, and researchers about understanding the relationship between energy consumption and economic growth to formulate effective policies. Although energy consumption is crucial to achieving the desired economic growth, it is criticized for contributing to undesirable CO 2 emissions and global warming (Kadir et al, 2023). This raises questions about whether to prioritize fostering economic growth at the expense of the environment or ensuring a clean environment at the expense of economic growth.…”

Section: Introductionmentioning

confidence: 99%

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The Impact of Renewable and Non-Renewable Energy Consumption on Aggregate Output in Pakistan: Robust Evidence from the RALS Cointegration Test

Khalid

2023

Preprint

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Pakistan’s energy consumption has significantly increased over the past three decades due to industrialization, population growth, and development activities. Pakistan has initiated short-term energy-oriented plans by establishing thermal power projects to meet the growing energy demands. However, these projects are more costly in terms of financial outlays and environmental harms than hydropower projects. Consequently, Pakistan is vulnerable to global oil price fluctuations and environmental damage. To address this dilemma, this empirical research examines the impact of non-energy factors (labour and capital) and energy-specific factors (renewable and non-renewable) on Pakistan’s aggregate output by considering annual data from 1980 to 2021. The analysis employs the newly established Residual Augmented Least Square (RALS) cointegration test and the Autoregressive Distributed Lag (ARDL) methodology to estimate the long-term cointegrating connection among the variables. The empirical findings demonstrate that non-energy and energy-specific factors positively and significantly impact Pakistan’s long-term aggregate output, except for petroleum consumption (insignificant). The study suggests a diversified energy-supply mix explicitly characterized by hydroelectricity, non-hydroelectric renewables (mainly solar and wind), and natural gas. Furthermore, the study suggests encouraging private sector participation in renewable energy initiatives and implementing effective carbon tax policies to mitigate CO2 emissions and improve economic growth. JEL Classification: D24, O47, Q42, Q43, Q48, Q54

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