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The Relationship between Renewable Energy Consumption and Economic Growth: Insights from Iceland and Azerbaijan

Author

Listed:
  • Shafa Aliyev

    (Sumgait State University, Sumgait, Azerbaijan; & Azerbaijan State University of Economics (UNEC), Baku, Azerbaijan; & Western Caspian University, Baku, Azerbaijan)

  • Ramil I. Hasanov

    (Western Caspian University, Baku, Azerbaijan; & Azerbaijan Technological University, Ganja, Azerbaijan)

  • Khanim Aghayeva

    (Western Caspian University, Baku, Azerbaijan)

  • Javadkhan Y. Gasimov

    (Nakhchivan State University, Nakhchivan, Azerbaijan)

  • Sadagat E. Ahmadova

    (Nakhchivan State University, Nakhchivan, Azerbaijan)

Abstract

Iceland leads globally in per capita green energy production, while oil-dependent Azerbaijan endeavors to transition its energy policy towards sustainable alternatives. Investigating the impacts of renewable energy consumption on the economy represents a significant contemporary scientific inquiry. The objective of this research is to empirically examine the causal relationship between GDP per capita, a key metric of economic growth, and renewable energy consumption, a fundamental aspect of the green economy. In this research, the Toda-Yamamoto causality test framework of the vector autoregressive (VAR) model was utilized to examine the causal relationship between the variables. The outcomes of this investigation reveal a significant causality between renewable energy consumption and economic growth in Iceland and Azerbaijan.

Suggested Citation

  • Shafa Aliyev & Ramil I. Hasanov & Khanim Aghayeva & Javadkhan Y. Gasimov & Sadagat E. Ahmadova, 2024. "The Relationship between Renewable Energy Consumption and Economic Growth: Insights from Iceland and Azerbaijan," International Journal of Energy Economics and Policy, Econjournals, vol. 14(5), pages 229-235, September.
    • Handle: RePEc:eco:journ2:2024-05-23
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Renewable Energy Consumption; Economic Growth; Toda-Yamamoto Causality Test; Iceland; Green Economics; Sustainability;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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