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

The aim of this paper is to analyze the causality relationship between economic growth, CO 2 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 impa...

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Bibliographic Details
Published in:Environmental economics and policy studies 2017-10, Vol.19 (4), p.691-709
Main Author: Zrelli, Maha Harbaoui
Format: Article
Language:English
Subjects:
Air pollution
Bidirectionality
Carbon dioxide
Carbon dioxide emissions
Causality
Consumption
Economic analysis
Economic development
Economic growth
Economic models
Economics
Economics and Finance
Electric utilities
Electricity
Electricity consumption
Emissions
Empirical analysis
Energy
Environmental Economics
Environmental management
Environmental policy
Error correction
Generalized method of moments
Mathematical models
Method of moments
Pollutants
Renewable energy
Renewable resources
Research Article
Resource management
Social Policy
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Summary:The aim of this paper is to analyze the causality relationship between economic growth, CO 2 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 CO 2 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.
ISSN:1432-847X
1867-383X
DOI:10.1007/s10018-016-0170-5