“Renewable Energy Consumption and Economic Growth: Evidence from a Panel of Top 20 Countries”

Abstract

Abstract Many nations have been working hard in recent years to adopt clean and non-conventional energy sources, unlike carbon-based power sources which have implications for economic development. To analyze the impact of renewable energy consumption on the sensitivity of economic growth amongst the top 20 renewable energy users, this study employs data from 20 countries. For the years 1990 to 2021, a sample of nations is chosen. Using Pesaran's universal diagnostic test, we address cross-sectional dependency in panels. The results show that traditional inputs of production, including renewable and renewable energy resources consumption, contribute favorably to economic growth in the studied nations over the long term. Long-term production elasticities regarding renewable energy are positive in many of the examined nations, according to results from single country time series. The study's findings show that renewable energy is a critical component of these countries' economic expansion and that these countries are on the track for long-term stable growth. The significant policy conclusion in this respect is that governments, international organizations, and energy planners should collaborate to adopt renewable arrangement policies across nations. Furthermore, policymakers in these nations need to adopt renewable energy legislation based on incentives to enhance resource efficiency.