Impact of renewable and non-renewable generation on economic growth in Greece

Abstract

The consumption of coal, oil, and other fossil fuels has raised concerns about climate change. The Kyoto Protocol and the Paris Agreement aimed to address climate change by promoting sustainable clean energy technologies. The UN conference in the United Arab Emirates in December 2023 concluded with an agreement marking the end of the fossil fuel era. All these developments aim to address climate change through the use of clean energy technologies while maintaining economic growth. The connection of climate change with the developing model has gained significant importance on countries’ adjusted plans for climate change. The fossil fuels have a negative impact on economic growth of Greece, implying a continuous dependence from non renewable energy sources and a burden of economic expansion. The reliable estimation of the consequences of climate change on growth, both spatial and temporal, constitutes a decisive parameter for the adjusted plan not only in short term level but also in a long term horizon. Focusing on the improvement of energy efficiency, on the maximization use of renewable energy sources in Greece, on the emphasis given to technologies and fuels storage as well as alternative technologies of energetic and industrial sector, the achievement of energetic and climate transition designed on Greece will be feasible on a long term strategy. The results showed that the growth of renewable energy sources to produce electric energy is necessary for the sustainable growth of Greece. Specifically, the results of ARDL model showed that the renewable energy sources have a positive impact on economic growth in Greece in the long run, and the non-renewable energy sources have a significant effect on economic growth in the short run. These results imply that the aim for investments on renewable energy sources from policy makers should be direct mainly on regions with high levels of carbon dioxide emissions due to lignite combustion.