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Investigating the impacts of biomass energy consumption and natural resource rent on economic growth under various regimes in emerging economies

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Abstract

In view of the increase in environmental degradation and the deterioration of natural resources, a set of previous studies has focused on clean energy sources, especially biomass energy. Although studies on the effects of biomass energy on economic growth have been given increasing attention recently, this research topic remains insufficiently investigated and the results remain inconclusive. Emerging countries, whether or not they are abundant in natural resources, rely heavily on energy sources that promise economic growth while being clean. This study examines the effects of biomass energy and natural resource rents on economic growth in the case of 14 selected emerging countries during the period 1984–2017, by applying a long-term approach and also following an analysis of various effects under different quantiles. The paper is aimed at developing a sustainable growth model by studying the varying economic effects of biomass energy consumption and natural resource rents (NRR) at different scales of economic growth. The purpose of the paper is, therefore, to verify whether biomass energy as a renewable energy can constitute a lever for economic expansion in different economic cycles. Panel quantile regression was used to analyze the varying effects of biomass energy consumption on economic growth, supported by a long-term analysis based on the Fully Modified Ordinary Least Squares (FMOLS) and Dynamic Ordinary Least Squares (DOLS) methods. The findings showed that emerging countries did not experience the same effects of biomass energy and natural resource rents on their economic growth. Indeed, the results of the quantile regression support the neutral hypothesis and suggest that biomass energy and natural resource rents do not have positive effects on economic growth whatever the level of economic development of the selected emerging countries. Further analysis revealed that the growth hypothesis is confirmed only for Oil-Rich Emerging Countries (OREC) and for medium and high levels of economic growth. The long-term analysis based on the FMOLS and DOLS techniques also supports the positive effects of biomass energy consumption on economic growth. The findings also indicated that only Brazil, Russia, India, and China (BRIC countries) benefit from positive effects of natural resource rents on economic growth in the long term and for the different quantiles. The originality of this paper lies in its provision of a method for decision makers to reconcile natural resources and biomass energy as a renewable energy source in their economic development strategies based on recorded economic growth.

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  1. Department of Business Administration, College of Business Administration, Majmaah University, Al-Majmaah, 11952, Saudi Arabia

    Abdullah Abdulmohsen Alfalih

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Alfalih, A.A. Investigating the impacts of biomass energy consumption and natural resource rent on economic growth under various regimes in emerging economies. Environ Sci Pollut Res 30, 35698–35714 (2023). https://doi.org/10.1007/s11356-022-24754-3

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