The Vector Auto Regression Analysis of the Link between Renewable Energy Consumption and Economic Development for Turkey and Kazakhstan

Abstract

The relationship between economic growth and renewable energy (RE) consumption has received enormous attention in the literature. However, there are diverse views about the Granger causality and nature of this relationship. The purpose of this empirical study is to investigate how RE consumption on electricity generation is affected by economic growth and electricity prices using data from 1990 to 2021 with the vector auto regression (VAR) approach. This is done by using case study countries (Turkey, and Kazakhstan), which have different levels of economic development, are located in diverse regions in the world, but with common effort of encouragement in term of policy implementations in RE use recently. Findings in this paper show RE consumption, for the period under consideration, is significantly determined by income and electricity price in the long run.