Renewable energy consumption, CO2 emissions and trade balance nexus in OECD countries: evidence from ARDL bounds approach
International Journal of Energy Sector Management
ISSN: 1750-6220
Article publication date: 25 May 2022
Issue publication date: 18 May 2023
Abstract
Purpose
Renewable energy is at the forefront of countries’ concerns due to its global economic and environmental impacts. Previous studies have thoroughly examined the impact of renewable energy on overall national income, and this paper aims to shed light on an indicator that has received insufficient attention in research regarding its impact on economic growth, using data from 2000 to 2018.
Design/methodology/approach
This study examines the causal relationship between trade balance, renewable energy consumption and CO2 emissions per capita in Organization for Economic Cooperation and Development (OECD) countries using an auto regression distributed lag model (ARDL) and Johansen Cointegration Test.
Findings
The findings reveal that there is evidence of a long-run and short-run cointegrating relationship and that renewable energy consumption in the long run impacts the trade balance positively and in the short run negatively.
Originality/value
Therefore, bioenergy trade between countries and local investment should be prioritized to increase the trade balance surplus, since many of OECD countries suffer from deficit problems.
Keywords
Acknowledgements
Availability of data and materials: Panel data from the World Bank database were used for this study, which used data from 34 OECD member countries between 2000 and 2018. As a proxy for the dependent variable, a trade balance was used, and the independent variable is renewable energy consumption as a percentage of total energy consumption. Also, CO2 emission per capita data was used in this study as a control variable.
Consent of publication: The authors guarantee that this manuscript has not been previously published in other journals and is not under consideration by other journals. The authors also guarantee that this manuscript is original and is their own work.
Citation
Mohammed Idris, F., Seraj, M. and Özdeşer, H. (2023), "Renewable energy consumption, CO2 emissions and trade balance nexus in OECD countries: evidence from ARDL bounds approach", International Journal of Energy Sector Management, Vol. 17 No. 4, pp. 645-660. https://doi.org/10.1108/IJESM-02-2022-0009
Publisher
:Emerald Publishing Limited
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