Analysing the Effects of the Business Cycle on Renewable Energy Consumption and Sustainable Development: Evidence from EU Countries

Mihail Busu (), Gabriel Staicu, Mihai Gheorghe, Enrico Prinz and Luis Miguel Fonseca
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Mihail Busu: Bucharest University of Economic Studies, Bucharest, Romania
Gabriel Staicu: Bucharest University of Economic Studies, Bucharest, Romania
Mihai Gheorghe: Bucharest University of Economic Studies, Bucharest, Romania
Enrico Prinz: EM Strasbourg Business School - University of Strasbourg, Strasbourg, France
Luis Miguel Fonseca: ISEP, Polytechnic University of Porto, Porto, Portugal

The AMFITEATRU ECONOMIC journal, 2024, vol. 26, issue Special 18, 1048

Abstract: This article examines the relationship between business cycles and renewable energy consumption (REC/capita) in the European Union (EU) over the past two decades. Using a panel data regression model, the study identifies GDP growth, government effectiveness, regulatory quality, and political stability as significant indicators impacting REC across all EU member states. The model presents significant regression coefficients, emphasising that these variables have a consistent impact on REC. Our research findings confirm the conservation hypothesis developed in the specific literature, identifying the REC s sensitivity to different economic shocks. From this perspective, the EU policymakers should consider a balanced approach between economic and environmental SDGs since economic growth not only promotes short-run welfare, but also contributes to long-run environmental sustainability.

Keywords: business cycle; economic growth; renewable energy consumption; sustainable development; government effectiveness; regulatory framework. (search for similar items in EconPapers)
JEL-codes: L26 O31 Q01 Q56 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:aes:amfeco:v:26:y:2024:i:special18:p:1048

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