Renewable Energy Consumption and Sustainable Development: A Panel Cointegration Approach

This research intends to examine the association amidst sustainable development, renewable energy consumption, non-renewable energy utilization, and GDP. As a result, the statistics of OECD nations covering the duration of 1990-2015 were used. As a sustainable development indicator, adjusted net savings, a very successful indicator, was preferred. Granger causality examination, over the long term, demonstrated the existence of bidirectional causality among these factors. FMOLS and DOLS tests were utilized to measure long-term coefficients. This study is a pioneering study for the literature due to these contributions. Results indicated that a 1% expansion in renewable energy utilization expanded sustainable development by 0.06% for FMOLS and 0.03% for DOLS. On the other hand, when non-renewable energy utilization expands by 1% in the long term, the degree of sustainable development diminishes by 0.32% as indicated by the FMOLS test and by 0.31% as indicated by the DOLS test. These results reveal the importance of renewable energy for sustainable development. In conclusion, this study recommends that OECD countries support projects that will enable them to use their renewable energy resources more and prioritize project research in this direction.