Macroeconomic Determinants of Renewable Energy Production in Jordan

Bashar Younis Alkhawaldeh, Arkan Walid Al-Smadi, Ahmad Y. A. Bani Ahmad, Suleiman Mustafa El-Dalahmeh, Najwa Alsuwais and Mohammad Nassar Almarshad
Additional contact information
Bashar Younis Alkhawaldeh: Department of Administrative Sciences, Faculty of Business, Jerash University, PO, Box 26150, Jordan
Arkan Walid Al-Smadi: Department of Banking and Finance, Faculty of Business, Jearsh University, Jordan
Ahmad Y. A. Bani Ahmad: Department of Accounting and Finance, Faculty of Business, Middle East University, Amman 11831, Jordan; & Applied Science Research Center, Applied Science Private University, Jordan
Suleiman Mustafa El-Dalahmeh: Department of Accounting, Faculty of Business, Jerash University, PO, Box 26150, Jordan
Najwa Alsuwais: Department of Finance and Banking Science, Faculty of Administrative and Financial Science, Irbid National University, Jordan
Mohammad Nassar Almarshad: Department of Financial and Administrative Sciences, Al-Huson University College, Al-Balqa Applied University, Jordan

International Journal of Energy Economics and Policy, 2024, vol. 14, issue 3, 473-481

Abstract: Using the years 1970–2022, this research looks at the macroeconomic variables that have an impact on Jordan's renewable energy production. To assess the main factors impacting Jordan's renewable energy scenario, the study employed the Dynamic Autoregressive Distributed Lag (DARDL) tool. Several important aspects affecting renewable energy production are highlighted in the study. A multitude of factors that statistically and positively impact the attainment of renewable energy are diverse economic activities as measured by the GDP. The contribution of a fair economy in speeding up and maintaining promotion of renewable energy projects in Jordan is noticeable. Moreover, FDI is one of the factors in fostering renewable energy production and its role is very significant and positive, thus, it is affecting renewable energy production in a great extent. In a nutshell, overseas funding should be meant to yield a great harvest in planting and constructing Jordanian renewable energy plants and equipments. The study also indicates that finance is not just fundamental for renewable energy movement but for the evolution of the renewable energy industry as well. While the tried and true fact of the positively and statistically significant case of link between renewable energy production and financial development underline the vital role of a financially prosperous area in redirecting investments from traditional resources to renewable energy and therefore contribute to its further expansion. However, that idea needed some modification due to the disagreement that the CO2 emissions also have significant role in reducing renewable energy production. The study has identified that there is a negative correlation between the carbon emissions and renewable energy production if it is computed statistically. The implementation of more effective policies and initiatives that will result in reduced carbon emissions becomes possible with all sectors working together to form a better environment for the establishment of renewable energy infrastructures.

Keywords: Dynamic Autoregressive Distributed Lag; Jordan; Macroeconomic Determinants; Renewable Energy Production (search for similar items in EconPapers)
JEL-codes: B23 N15 O11 Q2 (search for similar items in EconPapers)
Date: 2024
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