Revealing the energy paradox: Assessing the asymmetric impact of pandemic uncertainty on consumption of renewable and nonrenewable energy

Abstract

Uncertainties have grown around the world during the last few decades. Pandemic uncertainty has a substantial impact on economic activities, which may have a big influence on energy consumption. The goal of this investigation is to appraise the asymmetric influence of pandemic uncertainty on nonrenewable and renewable energy consumption in the top 10 energy consumer economies of the European Union (Germany, Poland, Spain, Netherlands, France, Italy, Belgium, Sweden, Czech Republic, and Finland). Previously, panel data approaches were utilized to obtain reliable outcomes on the pandemic‐energy consumption nexus, regardless of the fact that various nations did not autonomously exhibit similar relationship. This investigation, on the other hand, implements a special technique “Quantile‐on‐Quantile” that supports us to appraise time‐series interdependence in each economy by providing international yet nation‐specific perceptions of the connection among the variables. Estimates show that pandemic uncertainty reduces both nonrenewable and renewable energy consumption in most selected nations at stated quantiles of the data distribution. Nonrenewable energy consumption is much more influenced by pandemic uncertainty than renewable energy consumption. Furthermore, the rank of asymmetries across our variables differentiates by the economy, emphasizing the need for decisionmakers to pay much attention to pandemics‐related uncertainty and the energy sector.