Environmental Science and Pollution Research

, Volume 24, Issue 15, pp 13546–13560 | Cite as

The significance of renewable energy use for economic output and environmental protection: evidence from the Next 11 developing economies

  • Sudharshan Reddy Paramati
  • Avik Sinha
  • Eyup Dogan
Research Article


Increasing economic activities in developing economies raise demand for energy mainly sourced from conventional sources. The consumption of more conventional energy will have a significant negative impact on the environment. Therefore, attention of policy makers has recently shifted towards the promotion of renewable energy generation and uses across economic activities to ensure low carbon economy. Given the recent scenario, in this paper, we aim to examine the role of renewable energy consumption on the economic output and CO2 emissions of the next fastest developing economies of the world. The study employs several robust panel econometric models by using annual data from 1990 to 2012. Empirical findings confirm the significant long-run association among the variables. Similarly, results show that renewable energy consumption positively contributes to economic output and has an adverse effect on CO2 emissions. Given our findings, we suggest policy makers of those economies to initiate further effective policies to promote more renewable energy generation and uses across economic activities to ensure sustainable economic development.


Renewable energy consumption Sustainable economic development CO2 emissions Developing economies 

JEL classification

C23 O44 P28 Q01 R11 


  1. Alam MS, Paramati SR (2015) Do oil consumption and economic growth intensify environmental degradation? Evidence from developing economies. Appl Econ 47(48):5186–5203CrossRefGoogle Scholar
  2. Alam MS, Paramati SR (2016) The impact of tourism on income inequality in developing economies: does Kuznets curve hypothesis exist? Ann Tour Res 61:111–126CrossRefGoogle Scholar
  3. Alam MS, Paramati SR, Shahbaz M, Bhattacharya M (2015) Dynamics of natural gas consumption, output and trade: empirical evidence from the emerging economies (No. 21–15). Department of Economics, Monash UniversityGoogle Scholar
  4. Alam MS, Paramati SR, Shahbaz M, Bhattacharya M (2016) Natural gas, trade and sustainable growth: empirical evidence from the top gas consumers of the developing world. Appl Econ 1–15Google Scholar
  5. Al-mulali U, Fereidouni HG, Lee JY, Sab CNBC (2013) Examining the bi-directional long run relationship between renewable energy consumption and GDP growth. Renew Sust Energ Rev 22:209–222CrossRefGoogle Scholar
  6. Apergis N, Payne JE (2010a) Renewable energy consumption and growth in Eurasia. Energy Econ 32(6):1392–1397CrossRefGoogle Scholar
  7. Apergis N, Payne JE (2010b) Renewable energy consumption and economic growth: evidence from a panel of OECD countries. Energy policy 38(1):656–660CrossRefGoogle Scholar
  8. Apergis N, Payne JE (2014) The causal dynamics between renewable energy, real GDP, emissions and oil prices: evidence from OECD countries. Appl Econ 46(36):4519–4525CrossRefGoogle Scholar
  9. Apergis N, Payne JE (2015) Renewable energy, output, carbon dioxide emissions, and oil prices: evidence from South America. Energy Sources, Part B: Economics, Planning, and Policy 10(3):281–287CrossRefGoogle Scholar
  10. Apergis N, Payne JE, Menyah K, Wolde-Rufael Y (2010) On the causal dynamics between emissions, nuclear energy, renewable energy, and economic growth. Ecol Econ 69(11):2255–2260CrossRefGoogle Scholar
  11. Aslan A, Gozbasi O (2016) Environmental Kuznets curve hypothesis for sub-elements of the carbon emissions in China. Nat Hazards 82(2):1327–1340CrossRefGoogle Scholar
  12. Aslan A, Ocal O (2016) The role of renewable energy consumption in economic growth: evidence from asymmetric causality. Renew Sust Energ Rev 60:953–959CrossRefGoogle Scholar
  13. Awan AA (2015) Renewable energy in Pakistan: potential and prospects. Alternative Energy Development Board, Government of PakistanGoogle Scholar
  14. Bangladesh Power Development Board (2016) Development of renewable energy technologies by BPDB. Retrieved from: http://www.bpdb.gov.bd/bpdb/index.php?option=com_content&view=article&id=26
  15. Bhattacharya M, Paramati SR, Ozturk I, Bhattacharya S (2016) The effect of renewable energy consumption on economic growth: evidence from top 38 countries. Appl Energy 162:733–741CrossRefGoogle Scholar
  16. Bildirici ME (2012) The relationship between economic growth and biomass energy consumption. Journal of Renewable and Sustainable Energy 4(2):5CrossRefGoogle Scholar
  17. Bölük G (2013) Renewable energy: policy issues and economic implications in Turkey. Int J Energy Econ Policy 3(2):153–167Google Scholar
  18. Boon EM, Marletta MA (2006) Sensitive and selective detection of nitric oxide using an H-NOX domain. J Am Chem Soc 128(31):10022–10023CrossRefGoogle Scholar
  19. Brain JD, Valberg PA (1979) Deposition of aerosol in the respiratory tract 1–3. Am Rev Respir Dis 120(6):1325–1373Google Scholar
  20. Brimblecombe P (1996) Air composition and chemistry. Cambridge University Press, CambridgeGoogle Scholar
  21. Burger A (2015) Egypt’s renewable energy drive gains steam. Renewable Energy World. June 9, 2015. Retrieved from: http://www.renewableenergyworld.com/articles/2015/06/egypt-s-renewable-energy-drive-gains-steam.html
  22. Cabré MM, Lopez-Peña A, Kieffer G, Khalid A, Ferroukhi R (2015) Renewable energy policy brief: MEXICO. International Renewable Energy Agency (IRENA), Abu DhabiGoogle Scholar
  23. Chien T, Hu JL (2007) Renewable energy and macroeconomic efficiency of OECD and non-OECD economies. Energy Policy 35(7):3606–3615CrossRefGoogle Scholar
  24. Dietz T, Rosa EA (1994) Rethinking the environmental impacts of population, affluence and technology. Human Ecology Review 1:277–300Google Scholar
  25. Dietz T, Rosa EA (1997) Effects of population and affluence on CO2 emissions. Proc Natl Acad Sci 94(1):175–179CrossRefGoogle Scholar
  26. Dogan E (2015) The relationship between economic growth and electricity consumption from renewable and non-renewable sources: a study of Turkey. Renew Sust Energ Rev 52:534–546CrossRefGoogle Scholar
  27. Dogan E (2016) Analyzing the linkage between renewable and non-renewable energy consumption and economic growth by considering structural break in time-series data. Renew Energy 99:1126–1136CrossRefGoogle Scholar
  28. Dogan E, Seker F (2016a) Determinants of CO2 emissions in the European Union: the role of renewable and non-renewable energy. Renew Energy 94:429–439CrossRefGoogle Scholar
  29. Dogan E, Seker F (2016b) The influence of real output, renewable and non-renewable energy, trade and financial development on carbon emissions in the top renewable energy countries. Renew Sust Energ Rev 60:1074–1085CrossRefGoogle Scholar
  30. Dumitrescu EI, Hurlin C (2012) Testing for Granger non-causality in heterogeneous panels. Econ Model 29(4):1450–1460CrossRefGoogle Scholar
  31. Eghbal M (2008) The Next 11 emerging economies. Euromonitor International. Retrieved from: http://blog.euromonitor.com/2008/02/the-next-11-emerging-economies.html
  32. Ehrlich PR, Holdren JP (1971) Impact of population growth. Science 171(1):1212–1217CrossRefGoogle Scholar
  33. Fang Y (2011) Economic welfare impacts from renewable energy consumption: the China experience. Renew Sust Energ Rev 15(9):5120–5128CrossRefGoogle Scholar
  34. Farhani S (2013) Renewable energy consumption, economic growth and CO2 emissions: evidence from selected MENA countries. Energy Economics Letters 1(2):24–41Google Scholar
  35. Fronda AD (2015) Philippines renewable energy policy updates. Renewable Energy Management Bureau, Department of EnergyGoogle Scholar
  36. Granger CWJ (1969) Investigating causal relations by econometric and cross-spectral methods. Econometrica 37(3):424–438CrossRefGoogle Scholar
  37. Hastwell G (1975) Salbutamol aerosol in premature labour. Lancet 306(7946):1212–1213CrossRefGoogle Scholar
  38. Im KS, Pesaran MH, Shin Y (2003) Testing for unit roots in heterogeneous panels. J Econ 115(1):53–74CrossRefGoogle Scholar
  39. Inglesi-Lotz R (2014) The impact of renewable energy consumption to economic welfare: a panel data application. Energy Econ 53:58–63CrossRefGoogle Scholar
  40. Jebli MB (2016) On the causal links between health indicator, output, combustible renewables and waste consumption, rail transport, and CO2 emissions: the case of Tunisia. Environ Sci Pollut Res:1–17Google Scholar
  41. Johansen S (1991) Estimation and hypothesis testing of cointegration vectors in Gaussian vector autoregressive models. Econometrica 59(6):1551–1580CrossRefGoogle Scholar
  42. Levin A, Lin CF, Chu CSJ (2002) Unit root tests in panel data: asymptotic and finite-sample properties. J Econ 108(1):1–24CrossRefGoogle Scholar
  43. Maddala GS, Wu S (1999) A comparative study of unit root tests with panel data and a new simple test. Oxf Bull Econ Stat 61:631–652CrossRefGoogle Scholar
  44. Mahapatra S (2016) Indonesia plans to set up renewable energy utility. Clean Technica. January 12, 2016. Retrieved from: https://cleantechnica.com/2016/01/12/indonesia-plans-set-renewable-energy-utility/
  45. Mbarek MB, Saidi K, Feki R (2016) How effective are renewable energy in addition of economic growth and curbing CO2 emissions in the long run? A panel data analysis for four Mediterranean countries. J Knowl Econ 1–13Google Scholar
  46. Menyah K, Wolde-Rufael Y (2010) CO2 emissions, nuclear energy, renewable energy and economic growth in the US. Energy Policy 38(6):2911–2915CrossRefGoogle Scholar
  47. Ministry of Power (2015) National Renewable Energy and Energy Efficiency Policy (NREEEP): approved by FEC for the electricity sector. Federal Republic of NigeriaGoogle Scholar
  48. Noi H (2016) Renewable energy—Viet Nam’s power future. United Nations Development Programme. May 24, 2016. Retrieved from: http://www.vn.undp.org/content/vietnam/en/home/presscenter/pressreleases/2016/05/24/renewable-energy-viet-nam-s-power-future.html
  49. Ozturk I, Bilgili F (2015) Economic growth and biomass consumption nexus: dynamic panel analysis for sub-Sahara African countries. Appl Energy 137:110–116CrossRefGoogle Scholar
  50. Pao HT, Fu HC (2013a) Renewable energy, non-renewable energy and economic growth in Brazil. Renew Sust Energ Rev 25:381–392CrossRefGoogle Scholar
  51. Pao HT, Fu HC (2013b) The causal relationship between energy resources and economic growth in Brazil. Energy Policy 61:793–801CrossRefGoogle Scholar
  52. Paramati SR, Alam MS, Chen CF (2016a) The effects of tourism on economic growth and CO2 emissions: a comparison between developed and developing economies. J Travel Res 0047287516667848Google Scholar
  53. Paramati SR, Ummalla M, Apergis N (2016b) The effect of foreign direct investment and stock market growth on clean energy use across a panel of emerging market economies. Energy Econ 56:29–41CrossRefGoogle Scholar
  54. Paramati SR, Apergis N, Ummalla M (2017a) Financing clean energy projects through domestic and foreign capital: the role of political cooperation among the EU, the G20 and OECD countries. Energy Econ 61:62–71CrossRefGoogle Scholar
  55. Paramati SR, Shahbaz M, Alam MS (2017b) Does tourism degrade environmental quality? A comparative study of Eastern and Western European Union. Transp Res Part D: Transp Environ 50:1–13CrossRefGoogle Scholar
  56. Pedroni P (2000) Fully modified OLS for heterogeneous cointegrated panels. In: Baltagi BH (ed) Nonstationary panels, panel cointegration and dynamic panels, 15. Elsevier, Amsterdam, pp 93–130CrossRefGoogle Scholar
  57. Pedroni P (2001a) Fully modified OLS for heterogeneous cointegrated panels. Adv Econ 15:93–130Google Scholar
  58. Pedroni P (2001b) Purchasing power parity tests in cointegrated panels. Review of Economics and Statistics 83(4):727–731CrossRefGoogle Scholar
  59. Penkett S, Jones BMR, Brich KA, Eggleton AE (1979) The importance of atmospheric ozone and hydrogen peroxide in oxidising sulphur dioxide in cloud and rainwater. Atmos Environ 13(1):123–137CrossRefGoogle Scholar
  60. Pesaran MH (2004) General diagnostic tests for cross section dependence in panels. University of Cambridge, Faculty of Economics, Cambridge Working Papers in Economics No. 0435Google Scholar
  61. Raskin PD (1995) Methods for estimating the population contribution to environmental change. Ecol Econ 15(3):225–233CrossRefGoogle Scholar
  62. Renewable Energy Policy Network for the 21st Century (REN21) (2016) Renewables 2013 Global Status Report. ParisGoogle Scholar
  63. Sadorsky P (2009) Renewable energy consumption and income in emerging economies. Energy Policy 37(10):4021–4028CrossRefGoogle Scholar
  64. 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 Sust Energ Rev 39:14–23CrossRefGoogle Scholar
  65. Shahbaz M, Mahalik MK, Shah SH, Sato JR (2016) Time-varying analysis of CO2 emissions, energy consumption, and economic growth nexus: statistical experience in next 11 countries. Energy Policy 98:33–48CrossRefGoogle Scholar
  66. Shin S (2015) Four point plan for promoting renewable energy in South Korea. Center for Energy & Environmental Policy. Retrieved from: http://ceep.udel.edu/four-point-plan-for-promoting-renewable-energy-in-south-korea/
  67. Silva S, Soares I, Pinho C (2012) The impact of renewable energy sources on economic growth and CO2 emissions-a SVAR approach. European Research Studies 15(4):133–144Google Scholar
  68. Sinha A, Bhattacharya J (2016) Environmental Kuznets curve estimation for NO2 emission: a case of Indian cities. Ecol Indic 67:1–11CrossRefGoogle Scholar
  69. Sinha A, Bhattacharya J (2017) Environmental Kuznets curve estimation for SO2 emission: a case of Indian cities. Ecol Indic 72:881–894CrossRefGoogle Scholar
  70. Tiwari AK (2011) A structural VAR analysis of renewable energy consumption, real GDP and CO2 emissions: evidence from India. Econ Bull 31(2):1793–1806Google Scholar
  71. 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(6):1942–1950CrossRefGoogle Scholar
  72. U.S. Energy Information Administration (EIA) (2012) International Energy Statistics. Retrieved from: http://www.eia.gov/cfapps/ipdbproject/IEDIndex3.cfm?tid=1&pid=1&aid=8
  73. Watkins WM, Mosobo M (1993) Treatment of Plasmodium falciparum malaria with pyrimethamine-sulfadoxine: selective pressure for resistance is a function of long elimination half-life. Trans R Soc Trop Med Hyg 87(1):75–78CrossRefGoogle Scholar
  74. Wheeler E, Desai M (2016) Iran’s renewable energy potential. Middle East Institute. Jan 26, 2016. Retrieved from: http://www.mei.edu/content/article/iran%E2%80%99s-renewable-energy-potential
  75. Whitby KT (1978) The physical characteristics of sulfur aerosols. Atmos Environ 12(1):135–159CrossRefGoogle Scholar
  76. World Bank (2012) World Development Indicators. Retrieved from: http://data.worldbank.org/indicator
  77. Yıldırım E, Sukruoglu D, Aslan A (2014) Energy consumption and economic growth in the next 11 countries: the bootstrapped autoregressive metric causality approach. Energy Econ 44:14–21CrossRefGoogle Scholar
  78. York R, Rosa EA, Dietz T (2002) Bridging environmental science with environmental policy: plasticity of population, affluence, and technology. Soc Sci Q 83(1):18–34CrossRefGoogle Scholar
  79. Zeb R, Salar L, Awan U, Zaman K, Shahbaz M (2014) Causal links between renewable energy, environmental degradation and economic growth in selected SAARC countries: progress towards green economy. Renew Energy 71:123–132CrossRefGoogle Scholar

Copyright information

© Springer-Verlag Berlin Heidelberg 2017

Authors and Affiliations

  • Sudharshan Reddy Paramati
    • 1
  • Avik Sinha
    • 2
  • Eyup Dogan
    • 3
  1. 1.International Institute for Financial StudiesJiangxi University of Finance and EconomicsNanchangChina
  2. 2.Centre for Economics and FinanceAdministrative Staff College of IndiaHyderabadIndia
  3. 3.Department of EconomicsAbdullah Gul UniversityKayseriTurkey

Personalised recommendations