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The Interconnections between Renewable Energy, Economic Development and Environmental Pollution: A Simultaneous Equation System Approach

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  • Elias Soukiazis
  • Sara Proença
  • Pedro A. Cerqueira

Abstract

Although the relationship between renewable energy and economic performance has attracted the interest of researchers in recent years, most of the analysis has focused on economic growth, which does not reflect the quality of standards of living. We employ a different approach measuring the impact of renewable energy consumption on the Human Development Index, which also considers qualitative characteristics. Using a simultaneous equation system approach that describes the interrelations between economic variables, renewable energy and pollution emissions with feedback effects, we provide robust evidence for a set of 28 OECD countries over the period 2004-2015, that renewable energy, human and physical capital are important factors for explaining the degree of sustainable development. Renewable energy consumption is mostly determined by higher levels of human capital, R&D, and the countries’ development stage. Furthermore, the development level, total energy consumption, and the education level are important for explaining environmental pollution.

Suggested Citation

  • Elias Soukiazis & Sara Proença & Pedro A. Cerqueira, 2019. "The Interconnections between Renewable Energy, Economic Development and Environmental Pollution: A Simultaneous Equation System Approach," The Energy Journal, , vol. 40(4), pages 1-24, July.
    • Handle: RePEc:sae:enejou:v:40:y:2019:i:4:p:1-24
    DOI: 10.5547/01956574.40.4.esou
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    1. Omri, Anis, 2013. "CO2 emissions, energy consumption and economic growth nexus in MENA countries: Evidence from simultaneous equations models," Energy Economics, Elsevier, vol. 40(C), pages 657-664.
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    Cited by:

    1. Yao, Yao & Ivanovski, Kris & Inekwe, John & Smyth, Russell, 2019. "Human capital and energy consumption: Evidence from OECD countries," Energy Economics, Elsevier, vol. 84(C).
    2. Gamze Sart & Yilmaz Bayar & Funda Hatice Sezgin & Marina Danilina, 2022. "Impact of Educational Attainment on Renewable Energy Use: Evidence from Emerging Market Economies," Energies, MDPI, vol. 15(7), pages 1-15, April.
    3. Zheng, Jiajia & Wang, Xingwu, 2022. "Impacts on human development index due to combinations of renewables and ICTs --new evidence from 26 countries," Renewable Energy, Elsevier, vol. 191(C), pages 330-344.
    4. Zohra Dradra & Chokri Abdennadher, 2023. "Modeling the effects of renewable energy on sustainable development: evidence from simultaneous equations models," Economic Change and Restructuring, Springer, vol. 56(4), pages 2111-2128, August.
    5. Ali, Shahid & Xiaohong, Zhou & Hassan, Syed Tauseef, 2024. "The hidden drivers of human development: Assessing its role in shaping BRICS-T's economics complexity, and bioenergy transition," Renewable Energy, Elsevier, vol. 221(C).
    6. Du, Weijian & Li, Mengjie, 2023. "Opening the black box of environmental governance: Environmental target constraints and industrial firm pollution reduction," Energy, Elsevier, vol. 283(C).
    7. Filippidis, Michail & Tzouvanas, Panagiotis & Chatziantoniou, Ioannis, 2021. "Energy poverty through the lens of the energy-environmental Kuznets curve hypothesis," Energy Economics, Elsevier, vol. 100(C).
    8. Junda Qiu & Peng Li & Congzhe You & Honghui Fan, 2023. "Research of the impact of economic decline on air quality in Wuhan under COVID-19 epidemic," PLOS ONE, Public Library of Science, vol. 18(3), pages 1-15, March.
    9. Alexei Yumashev & Beata Ślusarczyk & Sergey Kondrashev & Alexey Mikhaylov, 2020. "Global Indicators of Sustainable Development: Evaluation of the Influence of the Human Development Index on Consumption and Quality of Energy," Energies, MDPI, vol. 13(11), pages 1-13, June.
    10. Zhao, Jun & Wang, Bo & Dong, Kangyin & Shahbaz, Muhammad & Ni, Guohua, 2023. "How do energy price shocks affect global economic stability? Reflection on geopolitical conflicts," Energy Economics, Elsevier, vol. 126(C).
    11. Eirini Stergiou & Nikos Rigas & Eftychia Zaroutieri & Konstantinos Kounetas, 2023. "Energy, renewable and technical efficiency convergence: a global evidence," Economic Change and Restructuring, Springer, vol. 56(3), pages 1601-1628, June.
    12. Marta Skiba & Maria Mrówczyńska & Agnieszka Leśniak & Natalia Rzeszowska & Filip Janowiec & Małgorzata Sztubecka & Wioleta Błaszczak-Bąk & Jan K. Kazak, 2024. "Implication of the EU Countries’ Energy Policy Concerning Scenarios Affecting the Air Quality Improvement," Energies, MDPI, vol. 17(16), pages 1-18, August.
    13. Stephen Taiwo Onifade & Bright Akwasi Gyamfi & Andrew Adewale Alola & Ilham Haouas, 2024. "Assessing the drivers of (non)conventional energy portfolios in the South Asian economies: The role of technological innovation and human development," Sustainable Development, John Wiley & Sons, Ltd., vol. 32(3), pages 1762-1773, June.
    14. Pedro André Cerqueira & Elias Soukiazis & Sara Proença, 2021. "Assessing the linkages between recycling, renewable energy and sustainable development: evidence from the OECD countries," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(7), pages 9766-9791, July.
    15. Iorgovan Daniela, 2024. "Artificial Intelligence and Renewable Energy Utilization," Proceedings of the International Conference on Business Excellence, Sciendo, vol. 18(1), pages 2776-2783.
    16. Kaewnern, Hathaipat & Wangkumharn, Sirikul & Deeyaonarn, Wongsathon & Yousaf, Abaid Ullah & Kongbuamai, Nattapan, 2023. "Investigating the role of research development and renewable energy on human development: An insight from the top ten human development index countries," Energy, Elsevier, vol. 262(PB).
    17. Paweł Ziemba & Abdullah Zair, 2023. "Temporal Analysis of Energy Transformation in EU Countries," Energies, MDPI, vol. 16(23), pages 1-21, November.
    18. Zhuang, Zheng-Yun & Chung, Cheng-Kung, 2024. "Dissecting the visiting willingness of driving visitors facing a retail market's dual-pricing policy for parking," Journal of Retailing and Consumer Services, Elsevier, vol. 78(C).
    19. Mahmut Unsal Sasmaz & Emre Sakar & Yunus Emre Yayla & Ulas Akkucuk, 2020. "The Relationship between Renewable Energy and Human Development in OECD Countries: A Panel Data Analysis," Sustainability, MDPI, vol. 12(18), pages 1-16, September.
    20. Henrique Oliveira & Víctor Moutinho, 2021. "Renewable Energy, Economic Growth and Economic Development Nexus: A Bibliometric Analysis," Energies, MDPI, vol. 14(15), pages 1-28, July.
    21. Sara Proença & Elias Soukiazis, 2023. "The process of sustainable entrepreneurship: a multi-country analysis," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(10), pages 10995-11010, October.
    22. Panagiotis Pegkas, 2024. "Energy Consumption and Human Capital: Does Human Capital Stimulate Renewable Energy? The Case of Greece," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(4), pages 17256-17283, December.
    23. Wang, Shuhong & Wang, Xiaoqing & Lu, Binbin, 2022. "Is resource abundance a curse for green economic growth? Evidence from developing countries," Resources Policy, Elsevier, vol. 75(C).
    24. Tehmina Zahid & Noman Arshed & Mubbasher Munir & Kamran Hameed, 2021. "Role of energy consumption preferences on human development: a study of SAARC region," Economic Change and Restructuring, Springer, vol. 54(1), pages 121-144, February.
    25. Simionescu, Mihaela & Radulescu, Magdalena & Belascu, Lucian, 2024. "The impact of renewable energy consumption and energy poverty on pollution in Central and Eastern European countries," Renewable Energy, Elsevier, vol. 236(C).

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