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Is saving the non-renewable resources worthwhile? Evidence of paradox of plenty on human capital development

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  • Afzal, Ayesha
  • Hasnaoui, Jamila
  • Noor, Ramsha
  • Banerjee, Arindam

Abstract

This study highlights the resource curse attached to the renewable energy abundance in low middle income countries. Renewable energy abundance diverts the focus of policies and investments from human capital development to the export of energy to high income countries who aim to diversify their energy mix for sustainable growth. This study analyses 76 low-middle income countries from 2010 to 2021 for energy curse channeled through low human capital development in the long run. This study incorporates the renewable energy curse into a Cobb-Douglas function and uses Index for human capital as a proxy for human capital development in a pooled fixed effects model. The results align with the expected hypotheses that renewable energy abundance negatively impacts human capital development, persistently, while we control for technology, infrastructure, health, energy poverty and FDI. The results call for policy implications that may help these countries to seek development in skill development, technological progress, manufacturing of renewable energy equipment and transparency of institutions as a strategy to cope up with the curse in the long run.

Suggested Citation

  • Afzal, Ayesha & Hasnaoui, Jamila & Noor, Ramsha & Banerjee, Arindam, 2023. "Is saving the non-renewable resources worthwhile? Evidence of paradox of plenty on human capital development," Resources Policy, Elsevier, vol. 83(C).
    • Handle: RePEc:eee:jrpoli:v:83:y:2023:i:c:s0301420723004397
    DOI: 10.1016/j.resourpol.2023.103728
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    More about this item

    Keywords

    Renewable energy; Resource curse; Human capital; Sustainability; Energy transition;
    All these keywords.

    JEL classification:

    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • I1 - Health, Education, and Welfare - - Health
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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