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A new approach to the renewable energy-growth nexus: evidence from the USA

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Abstract

The climate change is one of the leading problems in the today’s world. The rise of the renewable energy meets the sustainable growth objectives since it can decelerate the climate change. For this purpose, this paper investigates the relationship between the renewable energy consumption and the economic growth in the United States (USA). Theoretically, the paper constructs the growth model that captures the effects of the economic complexity indicator as a measure of capabilities and productivity for exporting the “complex” (high value-added) products. Empirically, the paper uses the Autoregressive Distributed Lag (ARDL) estimations and observes that both the economic complexity and the renewable energy consumption lead to a higher rate of economic growth in the USA for the period from 1965 to 2016. The paper also discusses the potential policy implications of the results for achieving the sustainable growth objectives.

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Notes

  1. In addition, Payne (2011) observes the significant causality that runs from the biomass energy consumption to the economic growth in the USA for the period from 1949 to 2007. Similarly, Aslan (2016) indicates that there is the causal relationship that runs from the biomass energy consumption to the economic growth in the USA for the period from 1960 to 2011. Kum et al. (2012) also observe that there is the bidirectional causality between the natural gas consumption and the economic growth in the USA for the period 1970 to 2008.

  2. There are also panel data studies for analyzing the relationship between the renewable energy consumption and the economic growth and the papers find that i) causality from the renewable energy to the economic growth (Inglesi-Lotz 2016; Jebli and Youssef 2015; Sadorsky 2009a); (ii) causality from the economic growth to the renewable energy (e.g., Fang and Chang 2016; Sadorsky 2009b); (iii) bidirectional causality (Apergis and Payne 2010a, 2010b, 2011, 2012, 2014; Chang et al. 2015; Sebri and Ben-Salha 2014); iv) no significant causality (e.g., Abanda et al. 2012; Aissa et al. 2014; Bhattacharya et al. 2016; Menegaki 2011); v) mixed results due to the different economic methodology, empirical growth model etc. (Carmona et al. 2017; Lin and Moubarak 2014; Pao et al. 2014; Salim and Rafiq 2012; Solarin and Ozturk 2015; Tugcu et al. 2012).

  3. The USA is the second country in terms of the share of the renewable energy consumption in the world. China is the first, whose has the share of 20.5% in 2016.

  4. At this stage, we also add the ECI than the replacement of K-L ratıo; however, there was a significant collinearity.

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Authors and Affiliations

  1. Faculty of Political Sciences, Istanbul Medeniyet University, Unalan Street 5 Uskudar, North Campus E104, 34700, Istanbul, Turkey

    Giray Gozgor

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  1. Giray Gozgor
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Correspondence to Giray Gozgor.

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Responsible editor: Philippe Garrigues

Appendix

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Table 7 Statistical details of the variables in the empirical model (1965–2016)
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Gozgor, G. A new approach to the renewable energy-growth nexus: evidence from the USA. Environ Sci Pollut Res 25, 16590–16600 (2018). https://doi.org/10.1007/s11356-018-1858-9

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