Abstract
In this paper, we analyze the effects of the energy transition process on economic growth in Spain and Portugal, countries that, adhering to European Union (EU) directives, opted to promote clean energies from the very start. On the one hand, we look at the energy transition laws introduced by the EU and other countries. On the other, we conduct a causal analysis of energy consumption and economic growth to confirm whether the change of energy model has generated positive effects on economic growth. The procedure was as follows. First, we conducted an aggregate causality analysis exploring the relationship between growth and energy consumption. As the results were not significant, we repeated the analysis with different disaggregations of renewable energy sources. With respect to solar thermal energy and economic growth, the main conclusion is that the data appear to show a one-way causal relationship for Portugal and EU-26 (European Union without Portugal and Spain) and a two-way relationship for Spain.
Highlights
The causality relationship between energy consumption and gross domestic product (GDP) is a popular theme in energy economics
We report an empirical analysis of the effectiveness of these policies examining what type of energy produces a growth in the economies of Portugal and Spain, or whether renewable energy consumption is boosted by more state investment
We start with the total consumption variable, including all renewable and non-renewable energies. This is gradually broken down to provide a full analysis of the causality relationship between consumption and GDP for the analyzed energies
Summary
The causality relationship between energy consumption and GDP (gross domestic product) is a popular theme in energy economics. One-way causality from GDP to energy consumption (conservation hypothesis): an increase in the real GDP causes an increase in energy consumption This is the most intuitive relationship that is to be expected between the two variables as GDP growth due to increased economic activity generates more energy consumption, including energy from renewable sources. In this context, the early empirical studies examined the direction of causality assuming that the underlying variables were stationary ([1,4], among others). The results of the estimations reported in Sustainability 2020, 12, 3343 this paper, analyzing data from 80 countries (including Spain and Portugal) in the period 1990−2007, reveal a two-way causality between renewable and non-renewable energy consumption and economic growth in both the short- and long-term.
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