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Renewable Electricity and Economic Growth relationship in the long run: panel data econometric evidence from the OECD

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  • Saptorshee Kanto Chakraborty

    (Paris School of Economics)

  • Massimiliano Mazzanti

    (University of Ferrara; SEEDS, Italy)

Abstract

Renewable electricity is a pillar of the sustainability transition being pursued through climate and energy policy strategies, and the European Green Deal represents a potential investment plan for this new phase of development. Economic growth can be inƒfluenced by the expansion of renewable electricity consumption, but the nature of their relationship is ambiguous and depends on various economic and policy factors. Th‘is paper investigates the long-run relationship between renewable electricity consumption and economic growth in selected countries over the period 1971-2015 using econometric panel data techniques that specifi€cally address cross-country heterogeneity and cross-sectional dependence. Our fi€ndings suggest that, on average, there is a signi€cant positive long-term relationship between renewable electricity consumption and economic growth, although Granger causality is not detected. Regarding causality, we do fi€nd per capita economic growth to be a causal factor for total electricity consumption.

Suggested Citation

  • Saptorshee Kanto Chakraborty & Massimiliano Mazzanti, 2021. "Renewable Electricity and Economic Growth relationship in the long run: panel data econometric evidence from the OECD," SEEDS Working Papers 0421, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Apr 2021.
    • Handle: RePEc:srt:wpaper:0421
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    Keywords

    Electricity Consumption; Economic Growth; Renewables; Cross-sectional Dependence; CS-ARDL Model; CS-DL Model;
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