Environmental Economics and Policy Studies

, Volume 19, Issue 4, pp 691–709 | Cite as

Renewable energy, non-renewable energy, carbon dioxide emissions and economic growth in selected Mediterranean countries

  • Maha Harbaoui ZrelliEmail author
Research Article


The aim of this paper is to analyze the causality relationship between economic growth, CO2 emissions and renewable and non-renewable electricity consumption, for a panel of 14 Mediterranean countries over the period 1980–2011. We use a generalized method of moments dynamic model to assess the impact of these three variables on growth and a panel vector error correction model to infer the direction of the causal relationship among the different variables. Empirical evidence shows that there is a bidirectional causal relationship between growth and electricity consumption (renewable and non-renewable) in the short-run and a unidirectional relationship running from renewable electricity consumption and economic growth in the long run. Renewable electricity consumption causes CO2 emissions in the long-run term and conversely in the short run. The variance decomposition result shown that the renewable electricity consumption is the most important factor to explain economic growth. The finding implies the importance of developing renewable energy in Mediterranean countries to enhance growth and limit pollutant emissions.


Economic growth Renewable electricity consumption Non-renewable electricity consumption CO2 emissions Mediterranean countries 

JEL Classification

Q43 Q44 P28 


  1. Al-mulali U, Binti Che Sab CH (2012) The impact of energy consumption and CO2 emission on the economic growth and financial development of in the Sub-Saharan African countries. Energy 39:180–186CrossRefGoogle Scholar
  2. Alshehry AS, Belloumi M (2015) Energy consumption, carbon dioxide emissions and economic growth: the case of Saudi Arabia. Renew Sustain Energy Rev 41:237–247CrossRefGoogle Scholar
  3. Ang JB (2007) CO2 emissions, energy consumption, and output in France. Energy Policy 35:4772–4778CrossRefGoogle Scholar
  4. Ang JB (2008) Economic development, pollutant emissions and energy consumption in Malaysia. J Policy Model 30:271–278CrossRefGoogle Scholar
  5. Apergis N, Payne JE (2009a) Energy consumption and economic growth: evidence from the Commonwealth of Independent States. Energy Econ 31:641–647CrossRefGoogle Scholar
  6. Apergis N, Payne JE (2009b) CO2 emissions, energy use and output in Central Africa. Energy Policy 37:3282–3286CrossRefGoogle Scholar
  7. Apergis N, Payne JE (2010a) Renewable energy consumption and economic growth: evidence from a panel of OECD countries. Energy Policy 38:656–660CrossRefGoogle Scholar
  8. Apergis N, Payne JE (2010b) Renewable energy consumption and economic growth in Eurasia. Energy Econ 32:1392–1397CrossRefGoogle Scholar
  9. Apergis N, Payne JE (2011a) The renewable energy consumption—growth nexus in central America. Appl Energy 88:343–347CrossRefGoogle Scholar
  10. Apergis N, Payne JE (2011b) Renewable and non-renewable electricity consumption-growth nexus: evidence from emerging market economies. Appl Energy 88:5226–5230CrossRefGoogle Scholar
  11. Apergis N, Payne JE (2012) Renewable and non renewable -energy consumption-growth nexus: evidence from a Panel Error Correction Model. Energy Econ 34:733–738CrossRefGoogle Scholar
  12. Arellano M, Bond S (1991) Some tests of specification for panel data: Monte Carlo evidence and application to employment equations. Rev Econ Studies 58(2):277–297CrossRefGoogle Scholar
  13. Arouri MH, Ben Youssef A, M’henni H, Rault C (2012) Energy consumption, economic growth and CO2 emissions in Middle east and North African countries. Energy Policy 45:342–349CrossRefGoogle Scholar
  14. Beldirici ME (2013) Economic growth and biomass energy. Biomass Bioenergy 50:19–24CrossRefGoogle Scholar
  15. Belloumi M (2009) Energy consumption and GDP in Tunisia: cointegration and causality analysis. Energy Policy 37:2745–2753CrossRefGoogle Scholar
  16. Blundell R, Bond S (1998) Initial condition and moment restrictions in dynamic panel data models. J Econ 87:115–143CrossRefGoogle Scholar
  17. Bond SR, Hoeffler A, Temple JR (2001) GMM estimation of empirical growth models. Discussion paper No. 3048, CEPRGoogle Scholar
  18. Bowden N, Payne JE (2010) Sectoral analysis of the causal relationship between renewable and non renewable energy consumption and real output in the US. Energy Sources Part B 5:400–408CrossRefGoogle Scholar
  19. Dinda S (2004) Environmental kuznets curve hypothesis, a survey. Ecol Econ 49:431–455CrossRefGoogle Scholar
  20. Engle RF, Granger CWJ (1987) Co-integration and error correction: representation, estimation and testing. Econometrica 55:251–276CrossRefGoogle Scholar
  21. Grossman GM, Krueger AB (1991) Environmental impacts of the North American free trade agreement. NBER 3914, Cambridge, MAGoogle Scholar
  22. Halicioglu F (2009) An econometric study of CO2 emissions, energy consumption, income and foreign trade in Turkey. Energy Policy 37(3):1156–1164CrossRefGoogle Scholar
  23. Hatemi-J A (2012) Asymmetric causality tests with an application. Empir Econ 43(1):447–456CrossRefGoogle Scholar
  24. Im K-S, Pesaran H, Shin Y (2003) Testing for unit roots in heterogeneous panels. J Econ 115:53–74CrossRefGoogle Scholar
  25. Johansen S (1988) Statistical analysis of cointegration vectors. J Econ Dyn Control 12(2–3):231–254CrossRefGoogle Scholar
  26. Johansen S, Juselius K (1990) Maximum likelihood estimation and inference on cointegration—with applications to the demand for money. Oxford Bull Econ Stat 52:169–210CrossRefGoogle Scholar
  27. Kraft J, Kraft A (1978) On the relationship between energy and GNP. J Energy Dev 3:401–403Google Scholar
  28. Lean HH, Smyth R (2009) CO2 emissions, electricity consumption and output in ASEAN, development research unit, Discussion paper DEVP 09-13Google Scholar
  29. Levin A, Lin CF, Chu J (2002) Unit root tests in panel data: asymptotic and finite sample properties. J Econ 108:1–24CrossRefGoogle Scholar
  30. Liz W, Van Montfort K (2007) Energy consumption and GDP in Turkey: is there o co-integration relationship? Energy Econ 29:1166–1178CrossRefGoogle Scholar
  31. Lotfalipour MR, Falahi MA, Ashena M (2010) Economic growth, CO2 emissions, and fossil fuels consumption in Iran. Energy 35:5115–5120CrossRefGoogle Scholar
  32. Menegaki A (2011) Growth and renewable energy in Europe: a random effect model with evidence for neutrality hypothesis. Energy Econ 33:257–263CrossRefGoogle Scholar
  33. Menyah K, Wolde-Rufael Y (2010) Energy consumption, pollutant emissions and economic growth in South Africa. Energy Econ 32:1374–1382CrossRefGoogle Scholar
  34. Ocal O, Aslan A (2013) Renewable energy consumption–economic growth nexus in Turkey. Renew Sustain Energy Rev 28:494–499CrossRefGoogle Scholar
  35. Omri A (2013) CO2 emissions, energy consumption and economic growth nexus in MENA countries: evidence from simultaneous equations models. Energy Econ 40:657–664CrossRefGoogle Scholar
  36. Ozturk I, Acaravci A (2011) Electricity consumption-and real GDP causality nexus: evidence from ARDL bounds testing approach for 11 MENA countries. Appl Energy 88:2885–2892CrossRefGoogle Scholar
  37. Ozturk I, Aslan A, Kalyoncu H (2010) Energy consumption and economic growth relationship: evidence from panel data for low and middle income countries. Energy Policy 38(8):4422–4428CrossRefGoogle Scholar
  38. Phillips PCB, Perron P (1988) Testing for a unit root in time series Regression. Biometrika 75(2):335–346CrossRefGoogle Scholar
  39. Sadorsky P (2009) Renewable energy consumption and income in emerging economies. Energy Policy 37:4021–4028CrossRefGoogle Scholar
  40. Salim RA, Rafiq S (2012) Why do some emerging economies proactively accelerate the adoption of renewable energy? Energy Econ 34:1051–1057CrossRefGoogle Scholar
  41. Sebri M, Ben-Salha O (2014) On the causal dynamics between economic growth, renewable energy consumption, CO2 emissions and trade openness: fresh evidence from BRICS countries. Renew Sustain Energy Rev 39:14–23CrossRefGoogle Scholar
  42. Shafiei S, Salim R (2014) Non-renewable and renewable energy consumption and CO2 emissions in OECD countries: a comparative analysis. Energy Policy 66:547–566CrossRefGoogle Scholar
  43. Soytas U, Sari R (2009) Energy consumption, economic growth and carbon emissions: challenges faced by a candidate member. Ecol Econ 68:1667–1675CrossRefGoogle Scholar
  44. Soytas U, Sari R, Ewing BT (2007) Energy consumption, income and carbon emissions in the United states. Ecol Econ 62:482–489CrossRefGoogle Scholar
  45. Stock JH, Watson MW (1989) New indexes of coincident and leading economic indicators. In: NBER Macroeconomics Annual 1989, vol 4, p 351–409Google Scholar
  46. Tsani SZ (2010) Energy consumption and economic growth: a causality analysis for Greece. Energy Econ 32:582–590CrossRefGoogle Scholar
  47. Tsurumani T, Managi S (2010) Decomposition of the environmental Kuznets curve: scale, technique, and composition effets. Environ Econ Policy Studies 11:19–36CrossRefGoogle Scholar
  48. Tugcu CT, Ozturk I, Aslan A (2012) Renewable and non-renewable energy consumption and economic growth relationship revisited: evidence from G7 countries. Energy Econ 34:1942–1950CrossRefGoogle Scholar
  49. Yildirim E, Saraç Ş, Aslan A (2012) Energy consumption and economic growth in the USA: evidence from renewable energy. Renew Sustain Energy Rev 16(9):6770–6774CrossRefGoogle Scholar
  50. Zhang ZX (2015) Energy and climate economics and policy. Environ Econ Policy Stud 17:179–183CrossRefGoogle Scholar

Copyright information

© Society for Environmental Economics and Policy Studies and Springer Japan 2016

Authors and Affiliations

  1. 1.Sesame UniversityTunisTunisia

Personalised recommendations