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Long-run effects of disaggregated renewable and non-renewable energy consumption on real output

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  • Valadkhani, Abbas
  • Nguyen, Jeremy

Abstract

We examine the long-run disaggregated effects of the consumption of four renewable (i.e. hydro, wind, solar and geo biomass), one alternative (i.e. nuclear) and three non-renewable (i.e. crude oil, coal and natural gas) energy sources on real GDP. We find robust evidence that real output is cointegrated with labour, capital, the trade openness index and the above eight sources of primary energy consumption. Utilising panel data (1965–2017 for 79 countries) we find that the disaggregated energy consumption model outperforms conventional aggregate models. Irrespective of which specification, different sub-periods or estimation methods are taken into account, all primary sources of energy positively contribute to GDP in the long run except for nuclear. It is observed that the positive effect of coal consumption on real output has been consistently declining to the point where in recent times (1990–2017) it is at an almost comparable level to the promising role of hydro and geo biomass. The long-run positive effects of solar and geo biomass are also on the rise in recent years, while wind maintains its momentum.

Suggested Citation

  • Valadkhani, Abbas & Nguyen, Jeremy, 2019. "Long-run effects of disaggregated renewable and non-renewable energy consumption on real output," Applied Energy, Elsevier, vol. 255(C).
    • Handle: RePEc:eee:appene:v:255:y:2019:i:c:s0306261919314837
    DOI: 10.1016/j.apenergy.2019.113796
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    Cited by:

    1. Skare, Marinko & Ozturk, Ilhan & Porada-Rochoń, Małgorzata & Stjepanovic, Sasa, 2024. "Energy as the new frontier: Dynamic panel data analysis revealing energy's transformative role in economic growth and technological progress," Technological Forecasting and Social Change, Elsevier, vol. 200(C).
    2. Xu, Weiwei & Zhou, Dan & Huang, Xiaoming & Lou, Boliang & Liu, Dong, 2020. "Optimal allocation of power supply systems in industrial parks considering multi-energy complementarity and demand response," Applied Energy, Elsevier, vol. 275(C).
    3. Adekoya, Oluwasegun B. & Ogunnusi, Timilehin P. & Oliyide, Johnson A., 2021. "Sector-by-sector non-renewable energy consumption shocks and manufacturing performance in the U.S.: Analysis of the asymmetric issue with nonlinear ARDL and the role of structural breaks," Energy, Elsevier, vol. 222(C).
    4. Liu, Tie-Ying & Lee, Chien-Chiang, 2020. "Convergence of the world’s energy use," Resource and Energy Economics, Elsevier, vol. 62(C).

    More about this item

    Keywords

    Energy consumption; GDP; Renewables; Non-renewables; Panel data;
    All these keywords.

    JEL classification:

    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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