The Technological Effects of Renewable and Non-Renewable Energy on Agricultural Productivity in Developed Countries

Abstract

Existing literature confirms both the role of agricultural technology in elevating agricultural productivity and the positive effects of green energy on environmental sustainability; nevertheless, less attention has been paid to agrotechnology’s energy sources and their adaptability to agri-environmental conditions using econometric methods. This study examines the association between renewable and non-renewable energy agrotechnology, and agricultural productivity in 32 developed nations from 2000 to 2021. We apply a difference Generalised Method of Moments (GMM) panel data estimation and Dumitrescu and Hurlin causality test. The findings report a significant and negative coefficient for non-renewable energy agrotechnology indicating that fossil fuel agrotechnology reduces agricultural productivity and thereby causes concerns over sustaining agricultural growth in developed countries. In contrast, the coefficient of renewable energy agrotechnology is positive and highly statistically significant, confirming maximising effects on agricultural productivity. We conduct two robustness checks to assess the credibility of the results. Using panel quantile regression analysis allows for establishing various relationships between the estimated variables at different quantiles of agricultural productivity. Testing for Dumitrescu and Hurlin causality test, we find bidirectional causal links between agricultural productivity and non-renewable energy agrotechnology, renewable energy agrotechnology and FDI, but only a one-way causal relationship between the other variables. This result suggests no integrated policy among the developed countries towards agricultural sustainability, despite their commitments to the Sustainable Development Goals (SDGs). These findings emphasise the employment of sustainable renewable energy agrotechnology as a strategy to tackle the fundamental problems of sustainable agricultural growth.