Exploring the Relationship between Renewable Energy Sources and Economic Growth. The Case of SAARC Countries

Qiucheng Li,Alina Badulescu,Muhammad Safdar Sial,Malik Shahzad Shabbir,Jing Li,Jacob Cherian,Ioana Mester

doi:10.3390/en14030520

Abstract

The purpose of this study is to examine the relationship between renewable energy sources and economic growth of the South Asian Association for regional cooperation (SAARC) countries. This study uses three main renewable energy sources, namely geothermal, hydro, and wind.This study collects data set from SAARC countries from 1995 to 2018 and applies a fixed effect test and panel vector error correction model (PVECM) for data analysis. The overall results show that all three renewable energy sources have a positive significant impact on economic development among SAARC countries’ economies. Moreover, hydropower renewable energy has more effects and influences on economic growth as compared to the other two individual sources of renewable energy.

Highlights

This study investigates the impact of three renewable energy sources such as hydro, geothermal, and wind on economic growth of south Asian economies between 1995 and
We used data sets collected from “World Development Indicators” (WDI), World Bank annual reports, as well as south Asian economic surveys published by Asian development bank (ADB)
This study analyses the causality between renewable sources of energy and development of South Asian countries’ economies

Summary

Introduction

Renewable energy sources are an important component of economic development. The population is increasing worldwide enormously, and the demand for the generation of energy from exhaustible conventional resources has increased. Environmental concerns and energy price rises jeopardize the sustainability of the growing economy. Renewable energy is formed after refilled natural resources to enhance energy security and catering to the issues of climate change and global warming. Renewable energy signifies a necessary element for accomplishing sustainable economic development [1]. The Administration of Energy Information (AIE) from the United States of America (USA) and Outlook of International Energy (2016) stated that a 48% increase in the utilization of global energy would be required by the year 2040 and the requirement fora decrease in carbon components is noticeable

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