The dynamic links among energy transitions, energy consumption, and sustainable economic growth: A novel framework for IEA countries

• Published in: Energy (Oxford) Vol. 222; p. 119935
• Main Authors: Khan, Irfan, Hou, Fujun, Zakari, Abdulrasheed, Tawiah, Vincent Konadu
• Format: Journal Article
• Language: English
• Published: Oxford Elsevier Ltd 01.05.2021; Elsevier BV
• Subjects: Capital; Carbon dioxide; Carbon dioxide emissions; Economic development; Economic growth; Economic sustainability; Economics; Emissions control; Empirical analysis; Energy consumption; Energy consumptions; Energy policy; Energy transition; Energy transitions; Environmental protection; IEA countries; R&D; Renewable energy; Renewable resources; Research & development; Subsidies; Sustainability; Sustainable development; Taxation; Energy transitions; IEA countries; Economic growth; Economic sustainability; Energy consumptions
• ISSN: 0360-5442; 1873-6785
• DOI: 10.1016/j.energy.2021.119935

The role of renewable energy in protecting the environment is well established. This study explores the dynamic links among energy transitions, energy consumption, and sustainable economic growth in thirty-eight International Energy Agency (IEA) countries. We apply advanced econometric methodologies for empirical analysis from 1995 to 2015 and find long-run relationships among the variables. However, the effect of energy transitions on economic growth is significant only in the long run, and economic sustainability influences economic growth in both the short run and the long run. Moreover, the energy transition is negatively associated with host countries’ economic growth, while economic sustainability, renewable energy consumption, non-renewable energy consumption, labor, and capital are positively related to that growth. Policymakers in the IEA countries are encouraged to settle carbon costs and taxation, provide continuous support to research and development, commercialize low–CO2–emission technologies, reduce subsidies on non-renewable energy, offer cooperative programs for technology transfers, and generate a green trade policy to procure sustainable development. Study limitations and directions for future research in the area are presented. [Display omitted] •Checked links among energy transitions, energy consumption, and economic growth.•Constructed PCA indexes for energy transition and crucial economic indicators.•Energy transition affects GDP in the long run and economic sustainability does so in the short and long runs.•Energy transition is negatively associated with economic growth.•Economic sustainability and energy consumption stimulate economic growth.