The impact of renewable energy consumption on economic growth : fossil-fuels-dependent countries

Other Title(s)

تأثير استهلاك الطاقة المتجددة على النمو الاقتصادي : الدول المعتمدة على الوقود الأحفوري

Dissertant

Yahya, Muhammad Hisham

Thesis advisor

Ismail, Muhannad

University

Birzeit University

Faculty

Faculty of Business and Economics

Department

Department of Economics

University Country

Palestine (West Bank)

Degree

Master

Degree Date

2022

English Abstract

Burning fossil fuels to produce energy has been an essential driver in economic activities for around two centuries.

Recently, despite the relatively still growing fossil-fuels consumption, renewable energy sources are being adopted and their share is rising with a higher rate.

For the sake of environmental and human health protection, countries are applying new policies to replace fossil fuels with renewables.

Although these are valuable steps towards energy security and environmental sustainability, the timing and the intensity of such a switch could harm the economy.

Literature on the subject is diverse and growing but it does not provide conclusive results.

More specialized studies within specific characteristics may carry better insights.

This study addresses the impact of renewable electricity on the economic growth in fossil-fuelsdependent countries whose share of renewables is noteworthy.

The study includes panel data from six fossil-fuels net-exporting countries and eight net-importing countries over the period 1995-2019.

The study applied unit root tests and co-integration tests that accounts for crosssection dependence and slope heterogeneity.

Cross-section dependence has been found among importers but not in exporters.

The variables in both models are integrated of order one I(1).

Fully Modified Least Squares method uncovered that 1% increase in renewables will increase GDP per capita by 0.08% and 0.10% for exporters and importers respectively.

(Dumitrescu & Hurlin, 2012) non-Granger causality test showed that renewables have a bidirectional causal effect on economic growth in exporting countries and importing countries.

feedback hypothesis for exporters suggests the beneficial effect on the economy due to renewables adoption, hence it is recommended to increase their share.

Also feedback hypothesis for importers infers that the economic growth has led to a higher renewables’ usage, consequently, it is recommended to continue embracing economic growth which is eventually going to promote renewables.

This ultimately will lead to achieve climate-change goals and reduce dependence on fuels imports as well.

Main Subjects

Economy

No. of Pages

64

Table of Contents

• APA
• MLA
• AMA

Language

English

Data Type

Arab Theses

Record ID

BIM-1429206