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Renewable and non-renewable energy consumption-growth nexus: Evidence from a panel error correction model

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  • Apergis, Nicholas
  • Payne, James E.

Abstract

Unlike previous renewable energy consumption-growth studies, this study examines the relationship between renewable and non-renewable energy consumption and economic growth for 80 countries within a multivariate panel framework over the period 1990–2007. The Pedroni (1999, 2004) heterogeneous panel cointegration test show a long-run equilibrium relationship between real GDP, renewable energy consumption, non-renewable energy consumption, real gross fixed capital formation, and the labor force with the respective coefficient estimates positive and statistically significant. There is little difference in the elasticity estimates with respect to renewable and non-renewable energy consumption. The results from the panel error correction model reveal bidirectional causality between renewable and non-renewable energy consumption and economic growth in both the short- and long-run. Also, there is bidirectional short-run causality between renewable and non-renewable energy consumption indicative of substitutability between the two energy sources.

Suggested Citation

  • Apergis, Nicholas & Payne, James E., 2012. "Renewable and non-renewable energy consumption-growth nexus: Evidence from a panel error correction model," Energy Economics, Elsevier, vol. 34(3), pages 733-738.
    • Handle: RePEc:eee:eneeco:v:34:y:2012:i:3:p:733-738
    DOI: 10.1016/j.eneco.2011.04.007
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    More about this item

    Keywords

    Renewable and non-renewable energy consumption; Growth; Panel; Granger-causality;
    All these keywords.

    JEL classification:

    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy

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