Abstract
This chapter analyzes the relationship between renewable and non-renewable electricity consumption and economic growth for 130 countries categorized into four groups based upon the World Bank income classification (high, upper middle, lower middle, and low income). The main motivation for this study is to find out whether the causality relationships change depending on the income level of countries. For this purpose panel causality tests are used. Electricity consumption data is disaggregated into renewable and non-renewable sources with the aim of providing more information for policy makers to use in designing energy policies in the context of environmental and sustainable development. The results of the study show that the conservation hypothesis is supported for high, upper-middle and lower-middle income groups, while the neutrality hypothesis is supported for low-income countries. The main finding of this chapter is that the causality relationship between electricity consumption and economic growth disappears for lower-income levels. We can conclude that implementing green economy policies in the context of sustainable development is a reasonable choice for developing countries, provided that it is supported by developed nations.
This is a preview of subscription content, log in via an institution.
Buying options
Tax calculation will be finalised at checkout
Purchases are for personal use only
Learn about institutional subscriptionsNotes
- 1.
- 2.
See Özturk (2010) and Payne (2010a) for excellent surveys on energy-growth nexus and Payne (2010b) on the causality relationship between electricity consumption and economic growth. Also see Al-Mulali et al. (2014) and Apergis and Payne (2011b) for a summary of the studies on the relationship between GDP growth and electricity consumption.
- 3.
References
Al-Mulali U, Fereidouni HG, Lee JYM (2014) Electricity consumption from renewable and non-renewable sources and economic growth: evidence from Latin American countries. Renew Sust Energ Rev 30:290–298
Apergis N, Payne JE (2010a) Renewable energy consumption and economic growth: evidence from a panel of OECD countries. Energy Policy 38(1):656–660
Apergis N, Payne JE (2010b) Renewable energy consumption and growth in Eurasia. Energy Econ 32(6):1392–1397
Apergis N, Payne JE (2011a) A dynamic panel study of economic development and the electricity consumption-growth nexus. Energy Econ 33:770–781
Apergis N, Payne JE (2011b) The renewable energy consumption–growth nexus in Central America. Appl Energy 88(1):343–347
Apergis N, Payne JE (2011c) Renewable and non-renewable electricity consumption–growth nexus: evidence from emerging market economies. Appl Energy 88(12):5226–5230
Apergis N, Payne JE (2012a) The electricity consumption-growth nexus: renewable versus non-renewable electricity in Central America. Energy Sources Part B Econ Plann Policy 7(4):423–431
Apergis N, Payne JE (2012b) Renewable and non-renewable energy consumption-growth nexus: evidence from a panel error correction model. Energy Econ 34(3):733–738
BP Statistical Review of World Energy (2013) http://www.bp.com
Erbaykal E (2008) Disaggregated energy consumption and economic growth: evidence from Turkey. Int Res J Financ Econ 20:172–179
Im KS, Pesaran HM, Shin Y (2003) Testing for unit roots in heterogeneous panels. J Econ 115:53–74
Joyeux R, Ripple RD (2004) The evaluation of standard of living and the role of household electricity consumption: a panel cointegration analysis. Paper presented in the New Zealand association of economists annual conference, 30 June–2 July 2004
Kraft J, Kraft A (1978) On the relationship between energy and GNP. J Energy Dev 3:401–403
Levin AC, Lin F, Chu CSJ (2002) Unit root tests in panel data: asymptotic and finite-sample properties. J Econ 108:1–24
Narayan PK, Prasad A (2008) Electricity consumption—real GDP causality nexus: evidence from a bootstrapped causality test for 30 OECD countries. Energy Policy 36:910–918
Narayan PK, Smyth R (2009) Multivariate Granger-causality between electricity consumption, exports, and GDP: evidence from a panel of Middle Eastern countries. Energy Policy 37:229–236
Özturk I (2010) A literature survey on energy-growth nexus. Energy Policy 38:340–349
Pao HT, Fu HC (2013) The causal relationship between energy resources and economic growth in Brazil. Energy Policy 61:793–801
Payne JE (2010a) Survey of the international evidence on the causal relationship between energy consumption and growth. J Econ Stud 37:53–95
Payne JE (2010b) A survey of the electricity consumption-growth literature. Appl Energy 87:723–731
Perron P (1989) The great crash, the oil price shock, and the unit root hypothesis. Econometrica 57:1361–1401
Pesaran M, Shin Y, Smith R (2001) Bounds testing approaches to the analysis of level relationships. J Appl Econ 16:289–326
Sadorsky P (2009) Renewable energy consumption and income in emerging economies. Energy Policy 37:4021–4028
Shaari MS, Hussain NE, Ismail MS (2012) Relationship between energy consumption and economic growth: empirical evidence for Malaysia. Bus Syst Rev 2(1):17–28
Solow RM (1956) A contribution to the theory of economic growth. Economics 70(1):65–94
Yu ESH, Jin JC (1992) Cointegration tests of energy consumption, income and employment. Resour Energy 14:259–266
Zhixin Z, Xin R (2011) Causal relationships between energy consumption and economic growth. Energy Proc 5:2065–2071
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Appendix
Appendix
High income countries | Upper-middle income |
---|---|
Australia | Angola |
Austria | Albania |
Belgium | Argentina |
Bahrain | Azerbaijan |
Belarus | Bulgaria |
Brunei Darussalam | Bosnia and Herzegovina |
Canada | Brazil |
Switzerland | Botswana |
Caribbean small states | Chile |
Cyprus | China |
Czech Republic | Colombia |
Germany | Costa Rica |
Denmark | Cuba |
Spain | Dominican Republic |
Estonia | Algeria |
Finland | Ecuador |
France | Gabon |
United Kingdom | Hungary |
Greece | Iran, Islamic Republic |
Hong Kong SAR, China | Iraq |
Croatia | Jamaica |
Ireland | Jordan |
Iceland | Kazakhstan |
Israel | Lebanon |
Italy | Libya |
Japan | Mexico |
Korea, Republic. | Macedonia, FYR |
Kuwait | Malaysia |
Liechtenstein | Namibia |
Lithuania | Panama |
Luxembourg | Peru |
Latvia | Portugal |
Monaco | Romania |
Malta | Serbia |
Netherlands | Turkmenistan |
Norway | Tunisia |
New Zealand | Turkey |
Oman | Venezuela, RB |
Poland | |
Qatar | |
Russian Federation | |
Saudi Arabia | |
Singapore | |
Sweden | |
Trinidad and Tobago | |
United Arab Emirates | |
United States |
Lower-middle income | Low income |
---|---|
Armenia | Benin |
Bolivia | Bangladesh |
Cote d'Ivoire | Eritrea |
Cameroon | Ethiopia |
Congo, Rep. | Haiti |
Egypt, Arab Republic | Kenya |
Georgia | Kyrgyz Republic |
Ghana | Cambodia |
Guatemala | Liberia |
Honduras | Mozambique |
Indonesia | Nepal |
India | |
Kosovo | |
Sri Lanka | |
Lesotho | |
Morocco | |
Moldova | |
Mongolia | |
Nigeria | |
Nicaragua | |
Pakistan | |
Philippines | |
Paraguay | |
Sudan | |
Senegal | |
El Salvador | |
Syrian Arab Republic | |
Ukraine | |
Uzbekistan |
Rights and permissions
Copyright information
© 2015 Springer International Publishing Switzerland
About this chapter
Cite this chapter
Telatar, M.E. (2015). Electricity Consumption, GDP and Renewables. In: Dorsman, A., Westerman, W., Simpson, J. (eds) Energy Technology and Valuation Issues. Springer, Cham. https://doi.org/10.1007/978-3-319-13746-9_6
Download citation
DOI: https://doi.org/10.1007/978-3-319-13746-9_6
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-319-13745-2
Online ISBN: 978-3-319-13746-9
eBook Packages: Business and EconomicsEconomics and Finance (R0)