Abstract
The overcoming of the issues on energy crisis and inequality have become the priorities as far developing as developed countries are concerned. Moreover, energy inequality has increased due to the shortage of natural gas and rising energy prices in retaliation to the economic recovery affected by the COVID-19 pandemic. This study aims to verify the linkage between the growth of renewable energy consumption and the country’s economic advancement. In this context, this paper determines the main driving forces of renewable energy consumption in European countries during 2000–2018. The annual data for panel regression analysis are retrieved from the OECD. Stat and World Bank Open Data. This empirical analysis employed a set of estimation procedures such as the panel unit root test (Levin, Lin & Chu; Im, Pesaran, Shin W-Stat; ADF-Fisher Chi-square; and PP-Fisher Chi-square methods), the Pearson correlation, fixed- and random-effects models, generalized method of moments (GMM), Hausman and the robustness tests. The results from the Hausman test ratified that the fixed-effects regression model is more suitable for involved panel balanced data. The results of fixed-effects regression and GMM identified the statistically significant and positive relationship between the share of renewable energy consumption of total final energy consumption, GDP per capita, and CO2 emissions per capita for the overall sample. In turn, the total labor force, the gross capital formation, and production-based CO2 intensity are inversely related to renewable energy consumption. The identified effects could provide some insights for policymakers to improve the renewable energy sector towards gaining sustainable economic development.
Highlights
The world public has become highly exercised over the energy crisis caused by the shortage of natural gas and rising energy prices in retaliation against the economic recovery affected by the COVID-19 pandemic
The findings showed that income per month, education, awareness of renewable energy benefits, employment status, the average electricity price, the concern of energy tax deduction, and the cost of non-renewable energy have a positive impact on the growth of renewable energy consumption (REC)
All variables were tested on stationarity by means of the unit root test by the methods of Levin, Lin and Chu (LLC), Im, Pesaran, Shin W-Stat (IPS), ADF-Fisher Chi-square (ADF), and PP-Fisher Chi-square (PP)
Summary
Publisher’s Note: MDPI stays neutralThe world public has become highly exercised over the energy crisis caused by the shortage of natural gas and rising energy prices in retaliation against the economic recovery affected by the COVID-19 pandemic. It is noteworthy here that constantly the biggest electric energy consumer was the industrial sector. In 2019 it consumed 9566.38 TWh of final electric energy, followed by the residential sector—6071 TWh, the commercial sector—4849.42 TWh, and transport—419.54 TWh. On the other hand, in the case of the EU final energy consumption structure for 2019 [6], the transport sector occupies the most significant share (31%), followed by households and industry (26 and 25%, respectively), services (14%), agriculture and forestry (3%) (Figure 1)
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