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Do High Oil Prices Obstruct the Transition to Renewable Energy Consumption?

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  • Shahriyar Mukhtarov

    (Department of World Economy, Baku Engineering University, Baku AZ0101, Azerbaijan
    UNEC Empirical Research Center, Azerbaijan State University of Economics (UNEC), Istiqlaliyyat Str. 6, Baku AZ1141, Azerbaijan)

  • Jeyhun I. Mikayilov

    (Energy and Macroeconomics, King Abdullah Petroleum Studies and Research Center, PO Box 88550, Riyadh 11672, Saudi Arabia
    Department of Statistics and Econometrics, Azerbaijan State University of Economics (UNEC), Istiqlaliyyat Str. 6, Baku AZ1141, Azerbaijan)

  • Sugra Humbatova

    (Department of World Economy, Baku Engineering University, Baku AZ0101, Azerbaijan
    Department of Economics and Management, Azerbaijan State University of Economics (UNEC), Istiqlaliyyat Str. 6, Baku AZ1141, Azerbaijan)

  • Vugar Muradov

    (Department of World Economy, Baku Engineering University, Baku AZ0101, Azerbaijan)

Abstract

The study analyzes the impact of economic growth, carbon dioxide (CO 2 ) emissions, and oil price on renewable energy consumption in Azerbaijan for the data spanning from 1992 to 2015, utilizing structural time series modeling approach. Estimation results reveal that there is a long-run positive and statistically significant effect of economic growth on renewable energy consumption and a negative impact of oil price in the case of Azerbaijan, for the studied period. The negative impact of oil price on renewable energy consumption can be seen as an indication of comfort brought by the environment of higher oil prices, which delays the transition from conventional energy sources to renewable energy consumption for the studied country case. Also, we find that the effect of CO 2 on renewable energy consumption is negative but statistically insignificant. The results of this article might be beneficial for policymakers and support the current literature for further research for oil-rich developing countries.

Suggested Citation

  • Shahriyar Mukhtarov & Jeyhun I. Mikayilov & Sugra Humbatova & Vugar Muradov, 2020. "Do High Oil Prices Obstruct the Transition to Renewable Energy Consumption?," Sustainability, MDPI, vol. 12(11), pages 1-16, June.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:11:p:4689-:d:368893
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    17. Shahriyar Mukhtarov & Sugra Humbatova & Natig Gadim-Oglu Hajiyev, 2021. "Is the Transition to Renewable Energy Consumption Hampered by High Oil Prices?," International Journal of Energy Economics and Policy, Econjournals, vol. 11(5), pages 377-380.
    18. Qi Zhang & Yi Hu & Jianbin Jiao & Shouyang Wang, 2022. "Exploring the Trend of Commodity Prices: A Review and Bibliometric Analysis," Sustainability, MDPI, vol. 14(15), pages 1-22, August.
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    20. Zhou, Deheng & Siddik, Abu Bakkar & Guo, Lili & Li, Houjian, 2023. "Dynamic relationship among climate policy uncertainty, oil price and renewable energy consumption—findings from TVP-SV-VAR approach," Renewable Energy, Elsevier, vol. 204(C), pages 722-732.
    21. Shahriyar Mukhtarov & Sugra Humbatova & Natig Gadim-Oglu Hajiyev & Sannur Aliyev, 2020. "The Financial Development-Renewable Energy Consumption Nexus in the Case of Azerbaijan," Energies, MDPI, vol. 13(23), pages 1-14, November.
    22. Shahriyar Mukhtarov & Fuzuli Aliyev & Javid Aliyev & Richard Ajayi, 2022. "Renewable Energy Consumption and Carbon Emissions: Evidence from an Oil-Rich Economy," Sustainability, MDPI, vol. 15(1), pages 1-12, December.

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