The Long-Run Relationship Between Renewable Energy Consumption, Non-Renewable Energy Consumption, Population, and Economic Growth in G20 Countries

Abstract

This study examines the impacts of renewable and non-renewable energy consumption, urban population, and population size on economic growth. This study utilizes the Panel Unit Root Test, Pedroni's Residual-based Cointegration Test, and Fully Modified Ordinary Least Square (FMOLS) techniques to analyze data from 2010 to 2021 for 19 countries within the Group of Twenty (G20). The cointegration test indicates that renewable energy consumption, nonrenewable energy consumption, urban population, and total population are long-term associated with GDP growth. According to FMOLS estimates, renewable energy consumption has a positive impact on GDP growth in G20 countries. The impact of renewable energy consumption on GDP growth varies; natural gas consumption does not affect GDP growth, but petroleum consumption significantly affects GDP growth in G20 countries. Furthermore, the study identifies the urban population as a control variable that harms GDP growth. The empirical evidence derived from this study posits that it would be judicious for G20 policymakers to proactively institute a suite of policies that invigorate the advancement of renewable energy sources, given that such a course of action has been demonstrated to engender a notable augmentation in GDP growth.