The impact of global renewable energy demand on economic growth – evidence from GCC countries

Abstract

PurposeThis study aims to examine the relationship between global renewable energy consumption and economic growth in Gulf Cooperation Council (GCC) countries from 2001 to 2019.Design/methodology/approachThis paper used a panel regression model to study the six GCC countries over the period from 2001 to 2019.FindingsAs expected, the findings indicated a significant and negative relationship between global renewable energy consumption and GCC economic growth. Additionally, there was a positive and significant relationship between GCC economic growth and the control variables, specifically labor, capital, CO2 emissions and non-renewable energy production.Practical implicationsThe results are of great importance to policymakers in GCC oil-exporting countries, as expected growth in renewable energy consumption will lower their economic growth in the future. Hence, they should first diversify their economy and lower their dependence on oil. Second, these countries can invest in solar energy through international joint ventures, especially with North African countries in close proximity to Europe, to become leaders in solar energy production.Originality/valueHow global energy consumption is related to GCC countries’ economic growth remains unclear, not only in GCC countries but also in many oil-exporting countries around the world, so future studies are needed. Furthermore, GCC governments will be able to create appropriate policies for the green economy and achieve their objectives if they have a comprehensive understanding of how global growth in renewable energy demand affects GCC economies.

The Impact of Renewable and Non-Renewable Energy Consumption on Aggregate Output in Pakistan: Robust Evidence from the RALS Cointegration Test

“…Similarly, Zou & Chau (2023) found that using oil and coal increases CO2 emission intensity in China, while hydropower consumption reduces CO 2 emission intensity. More importantly, Lahrech et al (2023) found a significant negative association between renewable energy consumption and economic growth in oil-exporting countries. The same results were confirmed by Soava et al (2018), who found that the increase in renewable energy consumption has a negative significant effect on economic growth in the BRICS-T countries.…”

Impact of economic growth and financial development on renewable energy use in selected oil-exporting countries

“…Additionally, financial development could lead to the promotion of renewable energy use in developed countries more than in developing ones. Lahrech et al (2023) concluded that increased use of renewable energy will reduce future economic growth in Gulf Cooperation Council countries. Murshed and Tanha (2021) examined the asymmetric relationship between renewable energy use and oil prices in a panel of net oil-importing-countries from South Asia during 1990-2018.…”