Can educational attainment promote renewable energy consumption? Evidence from heterogeneous panel models

Purpose For mitigating climate change, renewable energy consumption is recognized as one of the policy measures worldwide. However, there is a dearth of empirical studies focusing on education as one of the determinants of renewable energy consumption in the existing literature. Thus, this study aims to explore the impact of education, economic growth and foreign direct investment, financial development, CO2 emissions and urbanization on renewable energy consumption. Design/methodology/approach This study considers a balanced panel of selected South Asian Association of Regional Cooperation (SAARC) countries, namely, India, Pakistan, Sri Lanka, Nepal and Bangladesh, during the period 1995-2015. The study uses sophisticated second-generation panel data models for empirical analysis. Findings The result reveals that education and economic growth significantly enhance renewable energy consumption, whereas foreign direct investment, financial development, CO2 emissions and urbanization reduce it. Further, unidirectional causality from education, economic growth and urbanization to renewable energy consumption was observed, whereas a bidirectional causality was found between renewable energy consumption and financial development. Practical implications The emanated finding of this study is supposed to be helpful for the environmentalists, economists, banking sector and the practitioners in urban development can take insights from the study while framing the energy policy. Originality/value This is the first study that examines the role of education on renewable energy consumption in heterogeneous panel data settings for the selected SAARC countries.