Energy Consumption and Human Capital: Does Human Capital Stimulate Renewable Energy? The Case of Greece

This paper aims to empirically examine the relationship between energy consumption and human capital in Greece, using annual data from 1990 to 2021. Due to the availability of the data, we use the autoregressive distributive lag (ARDL) approach, which is more reliable for studies with small samples. The results indicate that human capital substantially negatively affects energy consumption in the long and short run. When splitting aggregate energy consumption into renewable and non-renewable our findings suggest that human capital stimulates renewable energy consumption and reduces non-renewable energy consumption. Moreover, we find that a higher level of human capital arises from increasing the share of the advanced-educated population, and technological progress reduces non-renewable energy consumption and increases renewable energy consumption. Policymakers in Greece should consider that investing in human capital could be the key for the country to reduce energy consumption and achieve a sustainable growth level by replacing polluting fuels with clean energy sources in the energy mix.