Determinants Of Renewable Energy Consumption Research Articles

Unravelling the role of financial development in shaping renewable energy consumption patterns: Insights from BRICS countries

In line with the pursuit of clean and affordable energy, our study contributes to the United Nations Sustainable Development Goals (UNSDGs-7 and -13) and the global fight against climate change by offering evidence-based insights. We conducted a panel analysis of BRICS (Brazil, the Russian Federation, India, China, and South Africa) economies to investigate the relationship between financial development and renewable energy utilization. Our empirical findings highlight a positive statistical association between economic growth and renewable energy consumption, indicating that higher economic growth correlates with increased renewable energy adoption. Similarly, significant positive relationships are observed between the consumer price index and domestic credit with renewable energy consumption. Moreover, our study also uncovers a counterintuitive relationship between foreign direct investment and renewable energy consumption. These results provide valuable insights into the determinants of renewable energy consumption in BRICS countries. From a policy perspective, we advocate for robust strategies to promote the adoption and utilization of renewable energy sources alongside the implementation of policies encouraging the uptake of clean technologies. Such measures can spur economic growth and contribute to achieving low-carbon targets and sustainability goals within the BRICS economies. Practical steps, including incentives like feed-in tariffs and subsidies, can further enhance the cost-effectiveness of renewable energy adoption in the investigated bloc.

Panel Data Analysis on the Determinants of Renewable Energy Consumption in African Countries

Africa consists of countries that are primarily dependent on fossil fuels for energy but have significant potential in many types of renewable energy. Therefore, the study investigates the factors affecting the use of renewable energy in 15 African countries in the context of panel data analysis over the period of 1980-2018. Cointegration analysis of variables is carried out using Kao, Pedroni, and Westerlund techniques, and Driscoll-Kraay and FGLS estimation methods examine long-term coefficients. The findings point out a cointegration between the variables. While economic growth, FDI, and trade openness support renewable energy use, financial development and natural resources hinder it. The findings also indicate a two-way causality between all independent variables and renewable energy use. The study will be able to put forward some policy suggestions that can improve the renewable energy sector in African countries.

Global economic policy uncertainty and renewable energy demand: Does environmental policy stringency matter? Evidence from OECD economies

Existing literature recommends the essential role of renewable energy consumption (REC) in achieving environmental sustainability. Although prior works have investigated the significant factors of REC, the effect of green environmental policies remains largely understudied, particularly in OECD countries. Therefore, this study specifically examines the role of environmental policy stringency (EPS) in enhancing (or diminishing) REC in 27 OECD economies between 2000 and 2019. Furthermore, we aim to specify the determinants of REC and investigate whether EPS could help moderate the relationship between global economic policy uncertainty (GEPU) and REC. To accomplish this, we employ both the fixed effects and panel quantile estimation methods. The findings underline that EPS has a positive and significant impact on REC, indicating that stricter green environmental policies lead to encouraging REC. Besides, the findings show that EPS has a beneficial role in lessening the negative effect of GEPU on REC, and its negative effect on REC is more moderated as moves from environments with low EPS to high EPS. The results also underscore that financial market development, FDI, remittances, technological innovation, and economic development positively promote REC whereas CO2 and natural resources rents have a detrimental impact. The findings are significant and a wide range of policy suggestions is recommended to governments, policymakers, and regulators to attain the energy and environmental sustainability targets set out in SDG 7 and SDG 13, respectively.

Economic and non-economic determinants of renewable energy consumption (REC): evidence from BRICS nations

Purpose This study aims to identify the various economic and non-economic determinants of renewable energy consumption (REC) in Brazil, Russia, India, China and South Africa (BRICS). Due to the adverse effect of carbon emission on the environment, every country is trying for a transition from fossil fuel towards renewable energy. Renewable energy plays a crucial role in reducing carbon emission and combating climate change. Understanding the determinants that influence REC helps to promote this transition. Design/methodology/approach The study is based on an unbalanced panel data over the period 2002–2019 for all five BRICS nations. The panel corrected standard error (PCSE) method has been adopted to examine the determinants of REC. Findings Industrialization, population growth and foreign direct investment (FDI) are found to be significant economic determinants of REC while patent on environmental technologies, political instability and industrial design are significant non-economic determinants of REC in the BRICS nations. Research limitations/implications The findings imply that to increase REC in BRICS nations, policymakers should incentivize industries for investments in renewable energy, attract FDI aligned with environmental regulations, raise population awareness through training, enforce industrial design standards, establish fair technology transfer frameworks to overcome patent barriers and create stable, long-term renewable energy policies with risk mitigation instruments to address political instability. Originality/value The study captures the effect of patents on environmental technologies and industrial design on the consumption of renewable energy. Thus, the novelty lies in investigating unexplored variables in the previous literature likely to affect REC.

What Drives Renewable Energy Consumption in Asia

In more recent years Asia has had the highest level of investment in renewables and the highest level of electricity generation from renewable sources. This paper analyzes the determinants of renewable energy consumption in Asia and the Pacific from 1996 to 2018. It explores the major challenges this region has faced in moving towards a more environmentally friendly generation and use of energy. We find that the renewable electricity output, GDP per capita, merchandise trade, the value added of the manufacturing sector and the income share held by the poorest population boost renewable electricity consumption. On the other hand, energy use per capita, access to electricity, energy imports, broad FDI, population growth and the income share held by the richest population lower consumption of electricity from renewable sources. Trade openness and being an island do not seem to have a statistically significant impact in our sample over the observed period.

Determinants of renewable energy consumption in the Fifth Technology Revolutions: Evidence from ASEAN countries

This study aims to investigate the factors of renewable energy consumption in the fifth Technology Revolution with specific evidence from ASEAN countries. The study applies an autoregressive distributed lag (ARDL) approach. The paper also uses the unrestricted fixed and random panel data methods. The manuscript identifies significant factors such as technological innovation, governmental policies, public awareness, electricity consumption, country population, foreign direct investment inflows, imports, exports, and economic growth that have influenced the renewable energy sector in these nations. This study also investigates the determinants that influence renewable energy in the context of international integration and the fifth technology revolution in ASEAN countries. The research analyzes data spanning two decades, from 2000 to 2022, through a combination of econometric modeling and machine learning techniques. Preliminary findings indicate that technological innovation, government policies, and public awareness significantly affect renewable energy consumption in these countries. The empirical results offer insights for policymakers and stakeholders in leveraging technological advancements for sustainable energy development. The findings from this study on the determinants of renewable consumption in the context of the Fifth Technology Revolution in ASEAN countries also have several important policy implications for the sustainable development goal.

Determinants of the renewable energy consumption: The case of Asian countries

In recent year, Asia has rapid economic growth and policy makers care about the renewable energy consumption. The motivation about the choice of variables with theory and empirical backing on the subject in the manuscript is the theory of Cobb- Douglas function and determinants of renewable energy consumption in the Asian countries. This paper investigates the nexus of electricity consumption, fossil fuel consumption, foreign direct investment inflows, economic growth, and renewable energy consumption in Asian countries. Utilizing panel data analysis, the study finds significant interrelationships among these factors and highlights their implications for energy policy and sustainable development in the region. This article aims to use the Cobb- Douglas Model to analyze the factors affecting renewable energy consumption at Asian developed countries for sustainable development goals. This study collected data from World Bank in the period 2000–2020 of 06 developed countries such as Japan, Korea, Singapore, Hong Kong, Israel and China. The empirical research results show that the electricity consumption, fossil fuel consumption, foreign direct investment inflows, economic growth affect the environmental pollution in 06 Asian developed countries. The electricity consumption, foreign direct investment inflows, economic growth positively affect to the renewable energy consumption. If the electricity consumption increases 1 % then the renewable energy consumption up 0.6 %; if the foreign direct investment inflows up 1 % then the renewable energy consumption up 0.82 %; If the economic growth up 1 % then renewable energy up 2.73 %. In addition, fossil fuel consumption negatively affects the renewable energy consumption. If the fossil fuel consumption increases 1 % then the renewable energy consumption down 0.26 %. The paper offers conclusions and recommendations for Asian countries to address these interconnected issues and transition towards a more sustainable energy future.

Impact of oil rents, oil prices, and investment taxes on renewable energy consumption and investment: An investigation

The aim of this paper is to explore the relationship between oil rents and renewable energy consumption and to provide evidence on the significance of the effects of oil prices and investment taxes on renewable energy investment. Two different panel data samples were used: six variables for 44 countries were utilized to prove that oil rents’ are an independent variable causing renewable energy consumption, and five variables for 10 countries were utilized to prove that higher oil prices and higher investment taxes lead to higher levels of renewable energy investment. For both samples, the Granger causality test, unit root test, correlation matrix, fixed and random multiple regressions, Hausman test, and panel cointegration test were performed. The paper adds to the narrow literature on the determinants of renewable energy consumption, mainly oil rents. It also provides further evidence on how higher investment taxes can lead to higher renewable energy investment. The findings confirm that “oil rents” directly affect the variations in renewable energy consumption and that investment taxes directly affect renewable energy investment as they lead to a higher selling price of oil-dependent products. However, no correlation was found between renewable energy investment and oil prices. Taxes are an effective instrument for changing people's and businesses' behaviour. Given the numerous advantages of renewable energy consumption and investment, governments must make plans and create regulations and laws to compel a gradual transition from non-renewable to renewable energy using consumption and investment taxes and other behavioral incentives.

The impact of financial development and technological innovations on renewable energy consumption: Do the roles of economic openness and financial stability matter in BRICS economies?

There is a significant gap in comprehensively probing the determinants of renewable energy consumption (REN) in developing markets. Extant literature suggests the beneficial role of using renewable energy in diminishing carbon emissions and increasing environmental quality. This work addresses this gap and contributes by investigating the factors which significantly affect the REN in emerging economies. More specifically, the present study attempts to contribute by probing the effects of economic openness and financial stability on REN while considering the roles of financial development, technological innovations, and economic growth. To achieve this purpose, this study focuses on BRICS emerging countries, which are five massive and outstanding emerging economies of the globe, and uses both the fixed effects and quantile panel data approaches for yearly data between 2000 and 2021. Remarkably, the results reveal that economic openness and financial stability positively impact REN, implying that rising them helps achieve environmental sustainability. Moreover, the findings indicate the positive and significant role of financial development and technological innovations in increasing REN, whereas economic growth impacts adversely. The findings have essential recommendations for governments, policymakers, and regulatory bodies especially by focusing on the drivers of REN and attempting to maintain banking sector stability to increase REN and promote environmental sustainability.

Gauging the impact of the strength of patent systems on renewable energy consumption

In recent years, renewable energy consumption has been at the centre stage of academic debate. Little is however known about the potential impact of the strength of patent systems (IPRs) and renewable consumption. This study addresses this issue using a GMM methodological framework for a panel of 47 developed and developing economies over the period 1998–2017. To the best of our knowledge this is the first study where two alternative indices that measure differences in strength of patent systems are employed to explore the underlying relationship whilst at the same time controlling for other potential determinants of renewable energy consumption. We find that protection of intellectual property rights across nearly all estimated models and country groups tends to have a negative impact on renewable energy consumption whilst a convex relationship is established when nonlinearities are explored. Finally, the global financial crisis is found to have a negative impact on renewable energy in both developed and developing economies. Further probing indicates that in a depressed economic environment the strength of IPRs might have a significant role to play in encouraging more renewable energy consumption.

Determinants of Renewable Energy Consumption in Africa: Evidence from System GMM

The adoption of renewable energy remains Sub-Saharan Africa’s best option to achieve sustainable growth and mitigate climate change. The essence of this study is to examine the factors that determine the adoption of renewable energy adoption in Africa by employing the System Generalized Methods-Of-Moment (GMM) to analyze data sourced from 1990 to 2019 on some selected African economies. The study examined the tripartite role of the economic, environmental, and socio-political factors on renewable energy adoption in Africa and noted that a positive relationship exists between economic and renewable energy adoption, supporting the validity of the feedback hypothesis. Hence, a policy that supports simultaneous growth of the economy and renewable energy could be adopted. The results further show that environmental factors such as carbon emission and ecological footprint negatively impact renewable energy (RE) adoption in Sub-Saharan African economies. The impact of socio-political factors is, at best mixed; for instance, the result of urbanization is positive and significant, suggesting that urbanization helps in the quick adoption of renewable energy in the studied economies, while the results of corruption show otherwise. To account for single-country dynamics, the study employed the full PMG and noted that the pollution haven hypothesis holds for a number of African economies. The results offer some policy implications.

Green taxation and renewable energy technologies adoption: A global evidence

There is substantial literature on the determinants of renewable energy consumption. This growing interest is related to the fact that renewable energy is not only one of the main drivers of greenhouse gas mitigation but also its contribution to the achievement of other sustainable goals. Despite this strategic role, the adoption level of renewable energy remains quite low. In this article, we address one of the determinants so far ignored by the literature, namely the environmental tax. This study, therefore, examines the effect of environmental taxes on the adoption of renewable technologies for 49 global samples between the 1996-2017 periods. The results through the FE Driscoll and Kraay, the Newey-West, the system GMM, and the quantile regression methodologies show that environmental tax increase the consumption of renewable energy. However, taking into account disparities in the level of development, the results suggest that the environmental tax spurs renewable energy technologies adoption in developed countries while it decreases renewable energy technologies adoption in developing countries. As policy implications, policymakers within this sample should consider the optimization of environmental taxation as a policy toward environmental protection. This would cause energy consumers to opt for renewable energy sources of energy to escape these taxes.

Financial integration and renewable energy consumption in China: do education and digital economy development matter?

Renewable energy is considered vital to addressing the issue of climate change and energy poverty. In recent times, empirics have tried to find the determinants of renewable energy consumption. Hence, the primary focus of the analysis is to estimate the impact of financial integration, education, and ICT on renewable energy consumption in China. In order to get the estimate of the variables, the analysis has applied the quantile ARDL model. The long-run estimates of the financial integration are positively significant at most quantiles, confirming the positive impact of financial integration on renewable energy consumption. Similarly, the long-run estimates of ICT are positively significant in almost all quantiles, confirming that digitalization helps increase renewable energy consumption in China. The long-term effect of education is significant at the higher quantiles. In the short run, the estimated coefficients of financial integration are positively significant at almost all quantiles; however, the estimated coefficients of ICT are positively significant in half quantiles. The short-run results of education are insignificant at most quantiles. In line with these results, several appropriate financial integration, digitalization, and education policies are recommended.

Renewable energy production capacity and consumption in Europe

Faced with the prospect of achieving 32 % renewable energy (RE) consumption by 2030 and climate neutrality by 2050, Europe has embarked on a path of promoting the use of clean energy through policies and investments essential to its development. Against this backdrop, the aim of the present article is to analyse both RE production capacity and the determinants of RE consumption in a sample of 30 European countries for the period 2010–2019. Through the construction of a synthetic measure by the zero unitarization method, the four types of RE (hydro, wind, solar and biofuels) are jointly assessed, yielding a ranking of countries categorized as being in a favourable, fairly favourable, rather unfavourable, or unfavourable situation. Furthermore, the possible relationship between RE production capacity and consumption is estimated with a sample of panel data (fixed effects and random effects). The results show that Sweden (SM: 0.419), Austria (SM: 0.384) and the Netherlands (SM: 0.381) are at the top of the ranking, demonstrating their leadership in RE generation and providing a model to follow for Eastern European countries whose production levels are still well below average. Moreover, the study provides evidence that the RE production capacity (coefficient: 0.253***), low gas emissions (coefficient: −0.479***), energy productivity (coefficient: 0.333***), and the size of the country (coefficient: 0.016***) foster the use of RE. Overall, European countries are on the right track to achieve the goals set, although they may be progressing at different speeds.

Asymmetric macroeconomic determinants of renewable energy consumption: do financial institutions and ICT trade matter?

This study aims to examine the asymmetric impact of financial institutions and information and communication technologies (ICT) trade on renewable energy demand in BRICS economies by using the cross-sectionally augmented nonlinear autoregressive distributed lag model. The asymmetric estimates of the financial institutions index confirm that a positive shock increases renewable energy consumption, and a negative shock reduces renewable energy consumption in BRICS economies. Similarly, the long-run asymmetric estimates attached to ICT trade are positively significant, confirming that a positive shock increases renewable energy consumption and a negative shock hurts renewable energy consumption. As far as country-wise estimates are concerned, the long-run asymmetric estimates of financial institutions are significant in Brazil, Russia, China, and South Africa. Similarly, the asymmetric estimates attached to ICT trade are significant in Russia, China, India, and South Africa. The results are asymmetric in nature, implying that negative and positive shocks have different effects on renewable energy consumption. Therefore, policymakers should consider both negative and positive shocks in financial institutions and ICT trade while devising policies regarding environmental sustainability and renewable energy consumption.

Convergence in renewable energy consumption and their influencing factors across regions: evidence from convergence algorithm approach.

This study examines the convergence in renewable energy consumption over the period 2000-2018 by using a convergence algorithm developed by Phillips and Sul. We used 183 countries which were sub-divided into five regions, namely: Sub-Saharan Africa (SSA); Middle East and North Africa (MENA); Europe and Central Asia (ECA); East and South Asia and the Pacific (ESAP); and America. The possible influencing determinants of the convergence/divergence clubs for the regions were also investigated by utilising multinomial logit regression. The determinants were majorly classified into macroeconomic, socio-economic, and institutional quality variables, which were computed via principal component analysis by using six governance indicators. The results show an absence of panel convergence and a weak speed of convergence for the regions. The final club formation results obtained from the iteration procedure show that 6 clubs (for SSA), 2 (for MENA and ECA), 5 (for ESAP), and 3 (for America) were formed for the regions. The determinants of renewable energy consumption play both significant and insignificant roles in the likelihood of a country belonging to a particular convergence club in each of the regions. This study found that at the regional level, the process of convergence in renewable energy consumption is yet to echo desirable emanations of renewable energy consumption policies sharing similar characteristics, but the narrative differs when clustering algorithms form clubs for each region. This implies that at regional levels, achieving convergence clubs in renewable energy consumption for environmental sustainability is possible, most especially when realistic policies around macroeconomic, socio-economic and institutional quality variables are taken into account.

Modeling the determinants of renewable energy consumption in Nigeria: Evidence from Autoregressive Distributed Lagged in error correction approach

Different solutions have been designed to solve the climate change impacts. One recommended solution is to use renewable energy sources to power up economic activities. Renewable energy lowers the carbon footprint, generates no emissions and reduces harmful air pollutants. This research investigates the determinants of renewable energy consumption in Nigeria from 1960 to 2019 using the Parameterization Autoregressive Distributed Lagged in Error Correction approach. Nigeria is used as a case study because of its position and role in African and global economies. In the long-run, gross domestic product and financial development promote renewable energy consumption, and fossil fuel energy consumption harms renewable energy consumption. As gross domestic product increases by 1%, renewable energy consumption increases by 0.11%. A 1% increase in fossil fuel energy consumption decreases renewable energy consumption by 0.0008%. As financial development increases by 1%, renewable energy consumption increases by 0.026%. In the short-run, trade openness has a negative impact on renewable energy consumption. A 1% increase in trade openness decreases renewable energy consumption by 0.005%. Therefore, it is suggested that the Nigerian government continue to create policies that increase the Nigerian economy's productive capacity and regulate the importation of fossil fuel-related goods in favor of renewable energy products.

Determinants of renewable energy consumption in agrarian Sub-Sahara African economies

The effect of ecological distortions and climate change issues have been at the forefront of the minds of policymakers and energy practitioners in recent decades. This concern is associated with the vision of the seventh and thirteenth Sustainable Development Goals that are centered on access to clean energy sources and mitigating climate change issues, as detailed in Vision 2030. To this end, the present study uses Pesaran’s Pooled Mean Group Auto Regressive Distributed Lag model to investigate the determinants of clean/non-conventional energy in the case of Sub-Saharan Africa. The empirical results show that a 1% increase in economic activity increases the level of renewable energy consumption by 0.128% in the short run. In the long-run, economic growth dampens the consumption of renewable energy by 0.402% over the investigated period. The reason for this peculiar result for the Sub-Saharan African economies could be attributed to the prevalent demand for conventional energy sources and the cost-related factor associated with clean energy technologies even when the economy (herein measured by Gross Domestic Product) is improving. Furthermore, the effect of energy (electricity from fossil fuel) also shows a statistically significant impact when trying to reduce the clean energy consumption. This arises from an expected trade-off effect. Regarding the causality analysis using the heterogeneous panel, the causality results present a one-way causality running from economic growth to renewable energy consumption. We also found there to be a feedback causality relationship between urbanization and renewable energy as well as agricultural value added and economic growth. Based on these findings, several policy decisions were prescribed for Sub-Saharan African economies such as the diversification of Sub-Saharan African economies energy to more renewable energy sources and the adoption of clean energy technologies that are reputed to be cleaner and environmentally friendly.

Can educational attainment promote renewable energy consumption? Evidence from heterogeneous panel models

PurposeFor mitigating climate change, renewable energy consumption is recognized as one of the policy measures worldwide. However, there is a dearth of empirical studies focusing on education as one of the determinants of renewable energy consumption in the existing literature. Thus, this study aims to explore the impact of education, economic growth and foreign direct investment, financial development, CO2 emissions and urbanization on renewable energy consumption.Design/methodology/approachThis study considers a balanced panel of selected South Asian Association of Regional Cooperation (SAARC) countries, namely, India, Pakistan, Sri Lanka, Nepal and Bangladesh, during the period 1995–2015. The study uses sophisticated second-generation panel data models for empirical analysis.FindingsThe result reveals that education and economic growth significantly enhance renewable energy consumption, whereas foreign direct investment, financial development, CO2 emissions and urbanization reduce it. Further, unidirectional causality from education, economic growth and urbanization to renewable energy consumption was observed, whereas a bidirectional causality was found between renewable energy consumption and financial development.Practical implicationsThe emanated finding of this study is supposed to be helpful for the environmentalists, economists, banking sector and the practitioners in urban development can take insights from the study while framing the energy policy.Originality/valueThis is the first study that examines the role of education on renewable energy consumption in heterogeneous panel data settings for the selected SAARC countries.

Analyzing the relationship between sustainable development indicators and renewable energy consumption

The transition to renewable energy sources remains a major challenge for developed and developing countries. Therefore, the study aims at investigating the relationship between sustainable development indicators and renewable energy consumption utilizing integrated data sets for 255 indicators expressing the sustainable development goals from 137 developed and developing countries. Principal component analysis then multiple linear regression tests are employed to conclude a mathematical model representing the numerical relationship between a set of sustainable development indicators and renewable energy consumption. The statistical analysis results include (i) an inverse correlation between Sustainable Development Index which expresses the dominant factor representing collected data and renewable energy consumption, (ii) a set of sustainable development indicators as the determinants of renewable energy consumption. The findings explain the rapid transformation of low Sustainable Development Index countries towards renewable energy technology by realizing the effective role of using renewable energy as a local solution. Moreover, the findings manifest the importance of the given sustainable development indicators in obtaining a more significant increase in renewable energy consumption. Using the concluded mathematical mode, planners and decision-makers can compromise the concluded indicators to attain a serious progressing step towards renewable energy transition aligned with achieving sustainable development.