Abstract
In this paper, we seek to find a balanced structure of energy sources that can simultaneously achieve two essential goals: (i) the environmental (degradation) goal and (ii) the economic (growth) goal. This study combines quantitative and qualitative methods to estimate and then rank each of the energy sources (including coal, gas, oil, hydropower, and renewable energy) to achieve the above two goals. This paper uses the weighted scoring method, the most popular method in multi-criteria decision-making techniques, to combine the rankings using five energy sources and two goals from panel data of 28 countries from Organization for Economic Co-operation and Development (OECD) countries for the period 1980–2017. Techniques for estimating the mean group long-run effect, including fully modified ordinary least squares (FMOLS) and dynamic ordinary least squares (DOLS), are used. The empirical findings of this paper reveal that, in the long term, in achieving both environmental goals and economic goals, the OECD countries should consider adopting a balanced energy mix in which the following structure is preferred: (i) hydropower, (ii) renewables and (iii) fossil fuels (oil, gas, coal).
Highlights
Energy is of widespread concern because of its effects on life, development, and the existence of current as well as future generations
To combine the rankings from these two parts, we develop a multi-criterion decision-making technique (MCDM) using five energy sources and two criteria
The final structure for the energy mix demonstrates a source of energy in the order of preferences that satisfy the following two conditions: (i) a particular source of energy does the least harm to the environment or has the lowest CO2 emissions and (ii) a particular source of energy boosts economic growth the most
Summary
Energy is of widespread concern because of its effects on life, development, and the existence of current as well as future generations. We have exploited energy from various sources, such as coal, oil, hydropower, wind, solar, geothermal, and nuclear. Each source of energy has different advantages and disadvantages. Fossil fuels were cheaper than renewables and had stable production. They caused pollution, whereas renewables were clean but limited in production. The selection of a source of energy depends on governmental direction, without deep and overall analysis of the economy and environment simultaneously
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