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Revisiting the impact of renewable energy consumption on economic growth: sectoral evidence from the USA

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Abstract

The aim of this study is to investigate the relationship between sectoral renewable energy consumption and economic growth in the US economy for the period 1950–2020 by using the Fourier component augmented unit root, cointegration, and causality analyses for the transportation, industrial, residential, electric power, and commercial sectors. Our results reveal in the long run that renewable energy will Granger cause growth through the new jobs it will create, the restructuring of the economy which is a prerequisite for replacing fossil energy with renewable energy. On the other hand, causal relationships are less stable and methodology and sector specific in the short run. Accordingly, the electric power and industrial sectors experience conservation patterns in terms of renewable energy consumption, while the growth hypothesis is confirmed for the commercial sector. Different implications are generated for each sector, which are now more important than ever given the current energy crisis in Europe and the urgent need to reduce dependence on fossil fuels.

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Notes

  1. The KPSS test is superior to the ADF and/or PP tests in terms of detecting stationary of series that are close to I(1), whereas the FKPSS test is able to present efficient result when the number, duration, and form of structural breaks in series are unknown.

  2. If one adds the maximum integration order (d) onto the lag length (i.e. p + d), then the Eqs. (10, 11, and 14) demonstrate a modified VAR model that the Toda-Yamamoto approach is based on.

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All materials including data and econometric codes used for the empirical analysis is available upon request.

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Authors and Affiliations

  1. Faculty of Economics and Administrative Sciences, Akdeniz University, Antalya, Turkey

    Can Tansel Tugcu

  2. Department of Regional and Economic Development, Agricultural University of Athens-EU CONEXUS, Athens, Greece

    Angeliki N. Menegaki

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  1. Can Tansel Tugcu
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  2. Angeliki N. Menegaki
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Contributions

The study conception and design were made by us. The abstract, introduction, literature review, discussion, and conclusion sections were written by Angeliki N. Menegaki. Material preparation, data collection, and analysis were performed by Can Tansel Tugcu.

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Correspondence to Can Tansel Tugcu.

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Tugcu, C.T., Menegaki, A.N. Revisiting the impact of renewable energy consumption on economic growth: sectoral evidence from the USA. Environ Sci Pollut Res 30, 44733–44745 (2023). https://doi.org/10.1007/s11356-023-25466-y

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