Evolution of energy mix in emerging countries: Modern renewable energy, traditional renewable energy, and non-renewable energy

Abstract

Recent global environmental concerns have called for efforts to promote the transition of energy sources toward renewable energy, particularly in emerging countries that prioritize high economic growth. One missing aspect in environmental studies is that renewable energy is composed of traditional and modern ones, where the former could induce environmental and health problems, and the latter could solve them. Accounting for different types of renewable energy, this study evaluates the energy mix evolution in relation to a country's development level (proxied by real GDP per capita) for 23 emerging countries from 1990 to 2016. By applying the pooled mean group autoregressive distributed lag (PMG-ARDL) model, we examine the short- and long-run linkages of a country's income level with the energy mix. To capture the energy mix, we use three variables of energy sources, (i) non-renewable, (ii) traditional renewable, and (iii) modern renewable energy. Our results show that the income level has a long-run positive relationship with non-renewable and modern renewable energy but a long-run negative relationship with traditional renewable energy. Our findings shed light on the importance of implementing policies targeting the shift from non-renewable energy toward modern renewable energy by the policymakers concerned in emerging countries.