Abstract
The study empirically examined the relationship between renewable energy consumption and economic growth in case of United Arab Emirates (UAE). We took annual time series data for the variables that include renewable energy consumption, GDP per capita, capital formation, employment, and trade openness for the time period ranging from 1996 to 2018. Initially, we applied the autoregressive distributed lag (ARDL) model for assessing the long-run relationship among the variables. We got confronted with the issue of Multicollinearity as we found the intercorrelations among the independent variables. Therefore, we adopted the alternative approach of Oridnary Least Square technique (OLS) for guaging the relationship between renewable energy and economic growth. We ran two different OLS equations, in the first equation we took renewable energy as dependent and economic growth as independent varibiable. In the second equation, we took economic growth as dependent and renewable energy as independent variable. In both of the cases, the results confirm that there is insignficnat realtionship between renewable energy consumption and economic growth. The reason could be that UAE is primarly dependent upon avaiation, tourism, hotelling, construction and real estate industries for revenues generation.Keywords: Renewable Energy, Sustainable Development, Economic Growth, Fossil Fuels, United Arab Emirates.JEL Classifications:Q01, Q4, Q42DOI: https://doi.org/10.32479/ijeep.11559
Highlights
According to the 2009 International Energy Outlook by the Energy Information Administration, “Renewables are the fastest growing source of world energy with consumption increasing by 3.0 percent per year.” Energy is required in each and every sector and segment of our lives (Ogunjobi et al, 2021)
We ran Oridnary Least Square technique (OLS) for twice, once by considering the GDP as a dependent variable to assess the relationship between econonmic growth and renewable energy cosnumption, in the other case we considered renewable energy as dependent variable to examine the impact of renewable energy consumption on economic growth
This paper attempted to examine the causal relationship between renewable energy and economic growth in case of United Arab Emirates for the time period 1996-2018
Summary
According to the 2009 International Energy Outlook by the Energy Information Administration, “Renewables are the fastest growing source of world energy with consumption increasing by 3.0 percent per year.” Energy is required in each and every sector and segment of our lives (Ogunjobi et al, 2021). Energy is required in each and every sector and segment of our lives (Ogunjobi et al, 2021) We need it at our homes, offices, schools, colleges, Universities, light and heavy Indutries, for transporting goods from one city to another city or from one country to another country (Adebola, 2011). It is an established fact or reality that access to energy is the basic right of every human being but millions of people are still suffering from energy shortage and poverty. Concerns over global warming has highlighted the environmental unsustainability of fossil fuels. The prolonged reliance upon conventional sources of energy could lead to energy disruptions and climate concerns (Apergis and Payne, 2010)
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