Abstract
Global concern about the climate crisis has incited movements for switching to renewable electricity. Renewable electricity can contribute to economic growth as an input factor (electricity generation) and also as an industry (renewable manufacturing). We introduce a new hypothesis, the renewable–growth hypothesis, to investigate the role of the renewable manufacturing industry in the energy–growth nexus study. To test the hypothesis, we select a target country group using the market share of the renewable manufacturing industry and conduct the Granger causality test for solar photovoltaic and wind power. The autoregressive distributed lag bounds testing approach is applied for the causality test. The results show that renewable electricity Granger causes economic growth in target countries, which supports the renewable–growth hypothesis. However, the hypothesis did not hold in countries that export renewable power facilities more than they install them for domestic demand. We believe that the renewable–growth hypothesis would be secured soon if renewable electricity expands broadly over the world.
Highlights
International attention to global warming comprises the global effort for carbon reduction
The country shows that the growth hypothesis presented in the previous nexus study are Canada for the solar PV, and Germany, India, and Spain for wind power
The difference between conventional electricity and renewable electricity sources lies in the weight of manufacturing-related parts
Summary
International attention to global warming comprises the global effort for carbon reduction. Climate change is referred to as the “climate crisis” [1]. This phenomenon draws attention to the topic of energy, in the electricity industry. Many countries have displayed their transition to renewable energy from fossil fuels, which are considered the main source of carbon emissions. Many governments, especially those in Asia, are still using coal-fired power stations. The demand growth for gas as an alternative to coal is emerging [2]. Transitioning to renewable energy is a means for solving problems caused by the climate crisis
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