Long-run effects of disaggregated renewable and non-renewable energy consumption on real output

Abbas Valadkhani and Jeremy Nguyen

Applied Energy, 2019, vol. 255, issue C

Abstract: We examine the long-run disaggregated effects of the consumption of four renewable (i.e. hydro, wind, solar and geo biomass), one alternative (i.e. nuclear) and three non-renewable (i.e. crude oil, coal and natural gas) energy sources on real GDP. We find robust evidence that real output is cointegrated with labour, capital, the trade openness index and the above eight sources of primary energy consumption. Utilising panel data (1965–2017 for 79 countries) we find that the disaggregated energy consumption model outperforms conventional aggregate models. Irrespective of which specification, different sub-periods or estimation methods are taken into account, all primary sources of energy positively contribute to GDP in the long run except for nuclear. It is observed that the positive effect of coal consumption on real output has been consistently declining to the point where in recent times (1990–2017) it is at an almost comparable level to the promising role of hydro and geo biomass. The long-run positive effects of solar and geo biomass are also on the rise in recent years, while wind maintains its momentum.

Keywords: Energy consumption; GDP; Renewables; Non-renewables; Panel data (search for similar items in EconPapers)
JEL-codes: Q32 Q42 Q43 (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (4)

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DOI: 10.1016/j.apenergy.2019.113796

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