From Fossil to Future: The Transformative Role of Renewable Energy in Shaping Economic Landscapes

Misbah Nosheen, Ahsan Akbar, Mariam Sohail, Javed Iqbal, Martina Hedvicakova, Sareer Ahmad, Syed Arslan Haider and Azeem Gul
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Misbah Nosheen: Department of Economics, Hazara University Mansehra, Pakistan
Ahsan Akbar: Department of Informatics and Quantitative Methods, Faculty of Informatics and Management, University of Hradec Kralove, Hradec Kralove, Czech Republic
Mariam Sohail: ESc Clermont Business School, Clermont Ferrand, France
Javed Iqbal: School of Economics, Quaid Azam University Islamabad, Pakistan
Martina Hedvicakova: Department of Informatics and Quantitative Methods, Faculty of Informatics and Management, University of Hradec Kralove, Hradec Kralove, Czech Republic
Sareer Ahmad: School of Economics, Quaid Azam University Islamabad, Pakistan
Syed Arslan Haider: Department of Management, Sunway Business School, Sunway University, 47500 Selangor Darul Ehsan, Malaysia
Azeem Gul: Department of International Relations, National University of Modern Languages, Pakistan

International Journal of Energy Economics and Policy, 2024, vol. 14, issue 4, 606-615

Abstract: In recent years, numerous countries have embarked on a transformative journey to reshape their energy portfolios by transitioning from fossil-based resources to renewable sources, significantly impacting economic growth. This study aims to scrutinize the influence of renewable energy consumption (REC) on GDP growth responsiveness in the top 20 renewable energy-consuming countries over the period from 1990 to 2021. To ensure robust panel analysis, the study addresses cross-sectional dependence using the diagnostic test proposed by Pesaran (2004). The long-run perspective reveals that both conventional factors of production, encompassing both renewable and non-renewable energy (Fossil Fuel Energy - FEF) consumption, make positive contributions to GDP growth in the sampled countries. Single-country time series analyses further underscore the positive long-run output elasticities concerning renewable energy in the majority of these nations. These findings highlight the pivotal role of renewable energy as a key determinant of sustained GDP growth, indicating that these countries are on a trajectory of sustainable development. The study's implications extend to policy considerations, urging collaborative efforts among governments, international organizations, and energy planners. There is a pressing need for the implementation of strategic renewable energy initiatives across nations. Governments are encouraged to adopt incentive-based policies to optimize the harnessing of renewable energy resources, fostering not only economic growth but also contributing to the global pursuit of sustainable and environmentally conscious practices.

Keywords: Fossil-Based Resources, Gross Domestic Product Growth, Renewable Energy, Non-Renewable Energy; Fully Modified Ordinary Least Squares (search for similar items in EconPapers)
JEL-codes: F6 O1 O5 (search for similar items in EconPapers)
Date: 2024
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