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Dynamics of renewable energy consumption and economic activities across the agriculture, industry, and service sectors: evidence in the perspective of sustainable development

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Abstract

This study aims to examine the impact of renewable and non-renewable energy consumption on the agriculture, industry, services, and overall economic activities (GDP) across a panel of G20 nations. The study makes use of annual data from 1980 to 2012 on 17 countries of the G20. To achieve the study objectives, we apply several robust panel econometric models which account for cross-sectional dependence and heterogeneity in the analysis. The empirical findings confirm the significant long-run equilibrium relationship among the variables. The long-run elasticities indicate that both renewable and non-renewable energy consumptions have significant positive effect on the economic activities across the sectors and also on the overall economic output. These results also imply that the impact is more from renewable energy on economic activities than that of non-renewable energy. Given that, our results offer significant policy implications. We suggest that the policy makers should aim to initiate effective policies to turn domestic and foreign investments into renewable energy projects. This eventually ensures low carbon emissions and sustainable economic development across the G20 nations.

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Notes

  1. Authors have considered industrial and service sectors as the modern sectors.

  2. We excluded Russia and Saudi Arabia from the sample due to unavailability of the data.

  3. A number of recent studies (e.g., Alam et al. 2017; Alam and Paramati 2016; Paramati et al. 2017a) have applied the panel unit root tests which account for cross-sectional dependence in the analysis, while some other studies (e.g., Alam and Paramati 2015) did not account for cross-sectional dependence while estimating panel unit root tests.

  4. Cerrato et al. (2013) provide detailed discussion on linear and non-linear panel unit root tests.

  5. On the other hand, Gozgor (2016) and Gozgor and Demir (2017) provide detailed discussion on the structural breaks in time-series data set.

  6. A number of recent empirical studies (Alam et al. 2015; Alam and Paramati 2017; Paramati et al. 2017d) have used heterogeneous panel no-causality test to explore the direction of causality between the variables.

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Authors and Affiliations

  1. International Institute for Financial Studies, Jiangxi University of Finance and Economics, Nanchang, China

    Sudharshan Reddy Paramati

  2. Department of Banking and Financial Management, University of Piraeus, Piraeus, Greece

    Nicholas Apergis

  3. School of Economics, University of Hyderabad, Hyderabad, India

    Mallesh Ummalla

Authors
  1. Sudharshan Reddy Paramati
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  2. Nicholas Apergis
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  3. Mallesh Ummalla
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Correspondence to Sudharshan Reddy Paramati.

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Paramati, S.R., Apergis, N. & Ummalla, M. Dynamics of renewable energy consumption and economic activities across the agriculture, industry, and service sectors: evidence in the perspective of sustainable development. Environ Sci Pollut Res 25, 1375–1387 (2018). https://doi.org/10.1007/s11356-017-0552-7

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  • DOI: https://doi.org/10.1007/s11356-017-0552-7

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