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The Balanced Energy Mix for Achieving Environmental and Economic Goals in the Long Run

Anh Hoang To () and Duc Vo ()
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Anh Hoang To: Business and Economics Research Group, Ho Chi Minh City Open University, 97 Vo Van Tan Street, District 3, Ho Chi Minh City 7000, Vietnam

Energies, 2020, vol. 13, issue 15, 1-1

Abstract: In this paper, we seek to find a balanced structure of energy sources that can simultaneously achieve two essential goals: (i) the environmental (degradation) goal and (ii) the economic (growth) goal. This study combines quantitative and qualitative methods to estimate and then rank each of the energy sources (including coal, gas, oil, hydropower, and renewable energy) to achieve the above two goals. This paper uses the weighted scoring method, the most popular method in multi-criteria decision-making techniques, to combine the rankings using five energy sources and two goals from panel data of 28 countries from Organization for Economic Co-operation and Development (OECD) countries for the period 1980–2017. Techniques for estimating the mean group long-run effect, including fully modified ordinary least squares (FMOLS) and dynamic ordinary least squares (DOLS), are used. The empirical findings of this paper reveal that, in the long term, in achieving both environmental goals and economic goals, the OECD countries should consider adopting a balanced energy mix in which the following structure is preferred: (i) hydropower, (ii) renewables and (iii) fossil fuels (oil, gas, coal).

Keywords: environmental degradation goal; economic growth goal; mean group analysis; weighted scoring method (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2020
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Handle: RePEc:gam:jeners:v:13:y:2020:i:15:p:3850-:d:390761