Renewable Energy Growth Nexus Research Articles

Disaggregating renewable energy-growth nexus: W-ARDL and W-Toda-Yamamoto approaches

The research on the effects of economic growth on renewable energy faces two significant limitations that may impede the formulation of accurate and effective renewable energy policy. The first limitation pertains to the use of an aggregate methodology, which relies solely on aggregated data for analyzing the relationship between renewable energy and economic growth. The second limitation is the absence of a systematic search for empirical models that could minimize estimation errors. In light of these constraints, this study proposes a disaggregate analysis to examine the concurrent effects of the components of economic growth on the components of aggregate renewable energy. Second, the research introduces two methodologies: wavelet-based and error-adjusted variants of the Auto-Regressive Distributed Lag Model (ARDL) and the Toda-Yamamoto Causality Test. The study presents two major findings. First, it reveals substantial differences between the effects of aggregate growth and growth components on aggregate renewable energy and its components in the ten countries with the highest carbon emissions. Second, the study demonstrates that the predictive accuracy of wavelet-based and error-adjusted ARDL and Toda-Yamamoto tests (W-ARDL and W-Toda-Yamamoto) for all estimated models is significantly higher than that of non-wavelet-based tests. The study suggests prioritizing a disaggregate approach to the renewable energy-growth nexus and utilizing wavelet-based and error-adjusted econometric techniques to improve the accuracy and efficiency of renewable energy policy.

Do institutional affiliation affect the renewable energy-growth nexus in the Sub-Saharan Africa: Evidence from a multi-quantitative approach

The prime objective of the study is to examine the institutional affiliation in assessing the nexus between renewable energy and growth by employing a multi-quantitative approach. The dataset includes the Sub-Saharan African countries encapsulating 1990–2020. At first, the cross-sectional dependence (CSD) and slope's homogeneity (SH) tests were employed. Afterward, CIPS and CADF were employed to obtain the dataset's stationarity elements. The Westerlund bootstrap cointegration test consistently employed the long-term institutional affiliations to confirm the cointegration features. Meanwhile, for examining the short- and long-term performance impacts between the variables, we utilized the CS-ARDL approach. Dynamic heterogeneity causation is involved in identifying the flow of causation. Our results reveal positive renewable energy-growth nexus. Conversely, we report a positive impact on institutional affiliation, while a negative moderating impact on the population is reported. Further, institutional quality negatively influences the renewable-energy growth relationship. We proposed that for attaining long-term growth, Sub-Saharan Africa must expand the investment in renewable energy projects, create well-resourced institutions, and determine contingency plans for renewable energy development. Similarly, other emerging states can also monitor the institutional affiliation affect to observe the renewable energy-growth nexus.

Human Development Index, ICT, and Renewable Energy-Growth Nexus for Sustainable Development: A Novel PVAR Analysis

The relevance of information and communication technology to long-lasting human improvement cannot be disregarded in this modern world. From this perspective, this study analyzed the association between information and communication technologies, renewable energy, economic growth, and human development indices considering CO2 emissions and remittances from 1990 to 2017 in 30 developing countries by using the panel vector autoregressive (PVAR) model. The findings of the empirical investigation point to the considerable favorable relationship between information and communication technology, renewable energy, and economic growth with the human development index. The causality results suggest that there is bidirectional causality between renewable energy and the human development index. In addition, there is unidirectional causality from human development to information and communication technology. However, the study recommends implementing information and communication technology-related policies to trigger renewable energy for sustainable growth and the human development index.

The Role of Economic Policy Uncertainty in Renewable Energy-Growth Nexus: Evidence From the Rossi-Wang Causality Test

This paper examines the causal relationship between renewable energy consumption and economic growth in four countries: Brazil, Germany, Japan, and the United States. Unlike previous papers, we control economic policy uncertainty’s effects to capture the role of capabilities on the renewable energy-growth nexus. The recent Vector Autoregression (VAR)-based Granger-causality test of Rossi-Wang shows a bidirectional causal relationship between renewable energy and the economic growth in Brazil and Germany. There is also a significant causality from renewables to economic growth in the United States.

Impact of cost, returns and investments: Towards renewable energy generation in Sub-Saharan Africa

Despite the importance of cost of capital and expected returns from investing on renewable electricity generation in Africa on one hand and the implications of such investments on economic, social and environmental factors on the other. These concepts are not well understood by non-finance and finance actors respectively. Studies that analyze renewable energy-growth nexus at regional and global level are lacking. Instead, existing studies emphasize on individual countries or panel of countries. The paper undertakes comparisons of costs and returns of selected renewable energy technologies in Africa and presents estimates of its impact on Africa's economic growth between 1990 and 2014. Even with abundant renewable resources and well performing technologies measured using levelized cost of electricity and expected internal rate of return, investment on renewable electricity generation is quite low. Findings from Autoregressive Distributed Lag approach and cointegration established a long run relationship among hydro power generation, carbon emissions and electricity consumption. Error Correction Model results suggest that investment in renewable generations excluding hydro power generation is boosted by economic growth, so long as development of such renewables corresponds with lesser carbon emissions. To accelerate renewable development, SSA countries will need to deploy initiatives that enhances national economic growth.

The impact of total and renewable energy consumption on economic growth in lower and middle- and upper-middle-income groups: Evidence from CS-DL and CCEMG analysis

Among the literature that examined the total and renewable energy-growth nexus, few of them were conducted in low and middle-income countries, however, the total-renewable energy-growth nexus in the lower and middle-income countries at the regional and global levels has not discussed. In this respect, this study examines the impact of total and renewable energy consumption on growth at the global and regional levels across the low-, lower and middle-, and upper-middle-income groups for a sample of 75 countries from 1980 to 2016. The cross-sectional augmented Autoregressive distributed lagged (CS-DL) and common correlated effect means group (CCEMG) have been employed. The findings reveal that total energy is significantly and positively affects economic growth in three income groups; especially this effect is increasing concerning the level of income group, and renewable energy consumption positively affects economic growth at the global level. At the regional levels, the effect of total and renewable energy consumption on growth is mixed across the income groups. Furthermore, negative and neutral effects of renewable energy on growth are highly prevalent than those from total energy at the regional levels. Therefore, policymakers need to reflect on cause-led negative effects and set relative policies, which could attract investors in renewable energy projects so that renewable energy will positively affect economic growth in all regions across income groups.

The Role of Institutions in the Renewable Energy-Growth Nexus in the MENA Region: a Panel Cointegration Approach

Institutional quality plays an undeniable role in every goal of accelerating economic growth. While the MENA region offers many natural assets that can make investments in renewable energy profitable, this region suffers from several institutional quality issues. In this line of thinking, this paper examines the relationship between renewable energy and economic growth in MENA countries taking into account institutional measures. To get a deeper insight into the relationship between this triangle of annual variables spreading from 1986 to 2015, our study considered a broader set of institutional variables, namely, corruption, bureaucracy quality, democracy accountability, law and order, and ethnic tensions. Using panel cointegration tests, we found that renewable energy, economic growth, and any institutional measures, of all considered in this study, are cointegrated. Furthermore, we found a strong causality running from renewable energy and any institutional measure, except law and order, to growth. A reverse path is also observed since there is also a strong causality running from growth to renewable energy when the causal regression includes any institutional measure. Our findings corroborate the fact that establishing an attractive institutional framework in MENA countries could be of ultimate importance in the profitability of renewable energy investments and in accelerating economic growth.

Renewable energy in Turkey: Great potential, low but increasing utilization, and an empirical analysis on renewable energy-growth nexus

Concerns about the exhaustion of fossil energy sources, energy security problems, and increasing environmental problems have led policy makers to pay greater attention to renewable energy sources all over the world. Additionally, high current account deficits stemming from energy import dependency make substitution of fossil energy with renewable energy a necessity for Turkey. Although Turkey has a great potential in terms of renewable energy, it has not begun to utilize this great potential until recent years. However, Turkey has many motives to utilize renewable energy further.This paper aims to investigate whether renewable energy consumption raises GDP in Turkey. For this purpose, the paper uses data spanning the period 1990–2015 and employs cointegration and causality tests which can present efficient output in small samples. The findings indicate that GDP is not related to renewable energy consumption and there is no causality between GDP and renewable energy consumption in Turkey. In conclusion, the paper argues that these findings may stem from the low share of renewable energy in total energy and Turkey needs to utilize renewable energy sources further to (i) meet energy needs for economic activities, (ii) mitigate environmental problems, and (iii) reduce energy import dependency and current account imbalances.

A new approach to the renewable energy-growth nexus: evidence from the USA.

The climate change is one of the leading problems in the today's world. The rise of the renewable energy meets the sustainable growth objectives since it can decelerate the climate change. For this purpose, this paper investigates the relationship between the renewable energy consumption and the economic growth in the United States (USA). Theoretically, the paper constructs the growth model that captures the effects of the economic complexity indicator as a measure of capabilities and productivity for exporting the "complex" (high value-added) products. Empirically, the paper uses the Autoregressive Distributed Lag (ARDL) estimations and observes that both the economic complexity and the renewable energy consumption lead to a higher rate of economic growth in the USA for the period from 1965 to 2016. The paper also discusses the potential policy implications of the results for achieving the sustainable growth objectives.

The renewable energy-growth nexus with carbon emissions and technological innovation: Evidence from the Nordic countries

Despite the fact that previous studies have extensively investigated the renewable energy-growth nexus, those studies have not considered the role of technological innovation. This study examines the relationship between renewable energy consumption, technological innovation, economic growth, and CO2 emissions in the four Nordic countries by constructing a vector autoregression (VAR) model. On the basis of a modified version of the Granger non-causality test, the results show a unidirectional causality running from renewable energy to CO2 emissions for Denmark and Finland and a bidirectional causality between these variables for Sweden and Norway. The findings also indicate a unidirectional causality running from technological innovation to renewable energy and from growth to renewable energy for the four Nordic countries. The results could not confirm any causality from renewable energy to growth. Three policy implications are offered: (i) renewable energy improves environmental well-being, (ii) the Nordic countries have very low energy intensities and high energy efficiencies, and (iii) technological innovation plays an effective role in the renewable energy-growth nexus.