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Do High Oil Prices Obstruct the Transition to Renewable Energy Consumption?

Shahriyar Mukhtarov (), Jeyhun I. Mikayilov (), Sugra Humbatova () and Vugar Muradov ()
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Jeyhun I. Mikayilov: Energy and Macroeconomics, King Abdullah Petroleum Studies and Research Center, PO Box 88550, Riyadh 11672, Saudi Arabia
Sugra Humbatova: Department of World Economy, Baku Engineering University, Baku AZ0101, Azerbaijan
Vugar Muradov: Department of World Economy, Baku Engineering University, Baku AZ0101, Azerbaijan

Sustainability, 2020, vol. 12, issue 11, 1-1

Abstract: The study analyzes the impact of economic growth, carbon dioxide (CO 2 ) emissions, and oil price on renewable energy consumption in Azerbaijan for the data spanning from 1992 to 2015, utilizing structural time series modeling approach. Estimation results reveal that there is a long-run positive and statistically significant effect of economic growth on renewable energy consumption and a negative impact of oil price in the case of Azerbaijan, for the studied period. The negative impact of oil price on renewable energy consumption can be seen as an indication of comfort brought by the environment of higher oil prices, which delays the transition from conventional energy sources to renewable energy consumption for the studied country case. Also, we find that the effect of CO 2 on renewable energy consumption is negative but statistically insignificant. The results of this article might be beneficial for policymakers and support the current literature for further research for oil-rich developing countries.

Keywords: renewable energy; economic growth; oil price; structural time series modeling—STSM; cointegration; Azerbaijan (search for similar items in EconPapers)
JEL-codes: Q Q0 Q2 Q3 Q5 Q56 O13 (search for similar items in EconPapers)
Date: 2020
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Handle: RePEc:gam:jsusta:v:12:y:2020:i:11:p:4689-:d:368893