The Implications of Renewable and Non-Renewable Energy Consumption for Economic Growth in Cameroon

Abstract

Energy is widely considered a propulsive force for economic activity and industrial development. In this context, this paper aims at investigating the implications of renewable and non-renewable energy consumption for economic growth in Cameroon. To achieve this objective, used is made of time series data spanning the period 1971 - 2016 and an error correction. We find a long-run relationship between gross domestic product, renewable energy consumption, non-renewable energy consumption, gross capital formation and government expenditure. We also find that with the exception of non-renewable energy, these variables register positive and significant long-run effects on economic growth. However, once the two energy sources are interacted, the observed substitution-effect between renewable and non-renewable energy utilization enhances the direct impact of each energy source on economic growth. This indicates that renewable energy is a major driver of economic growth in the short- and long-run in Cameroon. These findings suggest that increasing the exploitation and use of renewable energy sources have implications for overall prosperity in developing country settings.