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Is there a Link between Renewable Energy Consumption and Economic Growth? A Dynamic Panel Investigation for the OECD Countries

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  • Iuliana Matei

Abstract

This paper aims to investigate the relationship between renewable energy consumption and economic growth for 34 OECD countries, for the period 1990-2014. Using recent panel data techniques, outcomes show that increases in real GDP have a positive and statistically significant effect on renewable and non-renewable energy consumption (and vice-versa) only in the long run. In the short-run, the impacts differ according to the source of energy (energy coming from renewable or non-renewable sources). They show evidence for a bi-directional causality only between non-renewable energy consumption and GDP growth. The renewable sources are negatively influenced by an increase in the real GDP growth in the OECD sub-samples. Overall, the results validate the feed-back hypothesis in the case of non-renewable sources of energy in both, the short-run and the long-run. Regarding the renewable energy sources, findings validate the conservation hypothesis in the short-run, and the feed-back hypothesis in the long-run. As policy implications, governments should address growth and the expansion of renewable energy sector in a simultaneous way. This is possible by financing R & D investment in promising renewable technologies and related infrastructure networks in order to make renewable energy sources more competitive than fossil fuels, and also by promoting regional cooperation, development for clean-energy efficiency between countries.

Suggested Citation

  • Iuliana Matei, 2017. "Is there a Link between Renewable Energy Consumption and Economic Growth? A Dynamic Panel Investigation for the OECD Countries," Revue d'économie politique, Dalloz, vol. 127(6), pages 985-1012.
    • Handle: RePEc:cai:repdal:redp_276_0985
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    Cited by:

    1. Wang, Chen & Xia, Mengli & Wang, Piao & Xu, Junjie, 2022. "Renewable energy output, energy efficiency and cleaner energy: Evidence from non-parametric approach for emerging seven economies," Renewable Energy, Elsevier, vol. 198(C), pages 91-99.
    2. Armenia Androniceanu & Irina Georgescu & Ionuț Nica & Nora Chiriță, 2023. "A Comprehensive Analysis of Renewable Energy Based on Integrating Economic Cybernetics and the Autoregressive Distributed Lag Model—The Case of Romania," Energies, MDPI, vol. 16(16), pages 1-28, August.
    3. Fotio, Hervé Kaffo & Poumie, Boker & Baida, Louise Angèle & Nguena, Christian Lambert & Adams, Samuel, 2022. "A new look at the growth-renewable energy nexus: Evidence from a sectoral analysis in Sub-Saharan Africa," Structural Change and Economic Dynamics, Elsevier, vol. 62(C), pages 61-71.
    4. Sanel Halilbegović & Zana Pekmez & Abdul Rehman, 2023. "Modeling the Nexus of Renewable and Non-Renewable Energy Consumption and Economic Progress in Southeastern Europe: A Panel Data Analysis," Sustainability, MDPI, vol. 15(12), pages 1-21, June.
    5. Wenwei Lian & Bingyan Wang & Tianming Gao & Xiaoyan Sun & Yan Zhang & Hongmei Duan, 2022. "Coordinated Development of Renewable Energy: Empirical Evidence from China," Sustainability, MDPI, vol. 14(18), pages 1-20, September.
    6. Marius Dalian Doran & Maria Magdalena Poenaru & Alexandra Lucia Zaharia & Sorana Vătavu & Oana Ramona Lobonț, 2022. "Fiscal Policy, Growth, Financial Development and Renewable Energy in Romania: An Autoregressive Distributed Lag Model with Evidence for Growth Hypothesis," Energies, MDPI, vol. 16(1), pages 1-18, December.
    7. Ahtasham Nasir & Muhammad Zahir Faridi & Hammad Hussain & Khawaja Asif Mehmood, 2021. "Energy Consumption and Bi-Sectoral Output in Pakistan: A Disaggregated Analysis," iRASD Journal of Economics, International Research Alliance for Sustainable Development (iRASD), vol. 3(2), pages 68-79, September.
    8. Yasmeen, Rizwana & Tao, Rui & Jie, Wanchen & Padda, Ihtsham Ul Haq & Shah, Wasi Ul Hassan, 2022. "The repercussions of business cycles on renewable & non-renewable energy consumption structure: Evidence from OECD countries," Renewable Energy, Elsevier, vol. 190(C), pages 572-583.
    9. Tenaw, Dagmawe, 2022. "Do traditional energy dependence, income, and education matter in the dynamic linkage between clean energy transition and economic growth in sub-Saharan Africa?," Renewable Energy, Elsevier, vol. 193(C), pages 204-213.
    10. Agnieszka Wałachowska & Aranka Ignasiak-Szulc, 2021. "Comparison of Renewable Energy Sources in ‘New’ EU Member States in the Context of National Energy Transformations," Energies, MDPI, vol. 14(23), pages 1-17, November.

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