The Impact of Renewable and Non-Renewable Energy Consumption on Economic Growth: The Case of BRICS Countries
Chapter from the book:
Durgun,
B.
&
Durgun,
F.
(eds.)
2023.
Macro Aspects of Energy Economics.
Synopsis
With the Industrial Revolution, the replacement of human labor by machines in production made the energy sector the favorite of all nations. To achieve higher economic growth, increased energy consumption has become inevitable. Along with the increasing energy demand, the impact of energy consumption from non-renewable sources on environmental degradation has been the subject of research in recent years. In an effort to reduce the pressure of non-renewable energy on environmental pollution, alternative energy sources, such as renewable energy, have been promoted. While many studies in the literature examine the relationship between renewable energy and environmental degradation, the impact of renewable energy on economic growth has been largely overlooked. Therefore, in our study, the impact of renewable and non-renewable energy consumption on the economic growth of BRICS (Brazil, Russia, India, China, and South Africa) countries was examined using the fixed effects method for the period of 1990-2019. The findings of the study indicate that both renewable and non-renewable energy have a positive impact on economic growth, but the positive effect of renewable energy on growth is greater. In addition to the fixed effects model, the Generalized Method of Moments (GMM) was used as a robustness test, and the findings confirmed that the impact of renewable energy on economic growth is greater. The conclusion of the study suggests that promoting renewable energy consumption not only contributes to preventing environmental degradation but also provides more significant support for economic growth compared to non-renewable energy consumption.