Linear and nonlinear causal relationships between waste-to-energy and energy consumption in Germany

Abstract

To develop, redesign, and enforce prudent energy policies, investigating the causality between waste-to-energy and energy consumption is beneficial for policymakers. Although there are several studies on this topic, there is no consistent conclusion. Hence, this study employs the linear and nonlinear Granger causality tests to detect the bi-directional causality between waste-to-energy and energy consumption in both producer and consumer sides. The results show a bi-directional linear causal relationship between the waste-to-energy and energy consumption in industry, indicating sustainable waste management in German industries. Moreover, we find evidence of the uni-directional nonlinear causal relationship running from waste-to-energy to energy net imports, confirming the existence of the nonlinear effect of waste-to-energy on Germany’s net energy imports.