Renewable energy consumption and sustainable development in high-income countries

Abstract

ABSTRACT This study aims to analyse the relationship between renewable energy, non-renewable energy, economic growth and sustainable development in high-income countries. This analysis uses data from 20 high-income countries covering the 1990–2015 period and finds that there is a cointegration relationship among the considered variables. According to the estimation of long-term coefficients for the cointegrated variables, renewable energy consumption has a statistically significant positive effect on sustainable development in the long run. In high-income countries, a 1% increase in renewable energy consumption increases sustainable development by 0.326%. In contrast, non-renewable energy consumption has a statistically significant negative effect on sustainable development in the long run. In high-income countries, a 1% increase in non-renewable energy consumption reduces sustainable development by 1.004%. According to the Granger causality estimates obtained in this study, renewable energy is the cause of sustainable development in both the short and long term. These findings demonstrate the importance of renewable energy consumption to sustainable development in high-income countries. Therefore, while high-income countries increase renewable energy consumption, they should decrease non-renewable energy consumption as much as possible.