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Impact of renewable energy consumption on economic growth: evidence from European Union countries

    Georgeta Soava Affiliation
    ; Anca Mehedintu Affiliation
    ; Mihaela Sterpu Affiliation
    ; Mircea Raduteanu Affiliation

Abstract

This study examines the causal relationship between economic growth and renewable energy consumption using data for 28 countries of European Union, taken from Eurostat database for years from 1995 to 2015. In addition, motivated by EU Directive 2009/28/EC, the tendency of the share of renewable energy consumption into the final energy consumption is analysed. Various panel data techniques implemented in EViews are used. The empirical results suggest a positive impact of renewable energy consumption on economic growth, and emphasize bidirectional or unidirectional Granger causalities between the two macroeconomic indicators, for each country in the panel. These results justify the political decisions of EU concerning the necessity of increasing the renewable energy consumption, and prove that this type of energy consumption has a strong positive impact on economic growth. Thus, the inclusion of such policies in future EU and national strategies is further motivated. Finally, by means of linear regression, an increasing trend was found for the ratio between renewable energy consumption and final energy consumption for all but one of the EU countries.

Keyword : renewable energy consumption, final energy consumption, economic growth, panel countries, Granger causality, FMOLS

How to Cite
Soava, G., Mehedintu, A., Sterpu, M., & Raduteanu, M. (2018). Impact of renewable energy consumption on economic growth: evidence from European Union countries. Technological and Economic Development of Economy, 24(3), 914-932. https://doi.org/10.3846/tede.2018.1426
Published in Issue
May 17, 2018
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This work is licensed under a Creative Commons Attribution 4.0 International License.

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