Renewable and non-renewable electricity consumption, environmental degradation and economic development: Evidence from Mediterranean countries

• Published in: Energy policy 2019-10, Vol.133, p.110929, Article 110929
• Main Authors: Belaïd, Fateh, Zrelli, Maha Harbaoui
• Format: Article
• Language: English
• Subjects: Bidirectionality; Carbon dioxide; Carbon dioxide emissions; Causality; CO2 emissions; Consumption; Cooling; Econometrics; Economic development; Economic growth; Economic models; Electricity; Electricity consumption; Emissions; Energy policy; Energy security; Energy sources; Environmental degradation; Environmental protection; GDP; Gross Domestic Product; Heterogeneity; Humanities and Social Sciences; Mediterranean countries; Non-renewable energy consumption; Panel cointegration; Refuse as fuel; Renewable energy; Renewable energy consumption; Renewable energy sources; Renewable resources; Security
• ISSN: 0301-4215; 1873-6777
• DOI: 10.1016/j.enpol.2019.110929

In this article, we develop an empirical model to investigate the causal link amid renewable and non-renewable electricity consumption, GDP and carbon emissions by using a panel of 9 Mediterranean countries over the period 1980–2014. Using the PMG panel ARDL and panel econometric technics, heterogeneity and cross-sectional dependence among the panel were considered to explore the long and short-run dynamic relationships as well as the validity of a proposed model. The results provide panel empirical evidence that there is short-term bidirectional causality between GDP, renewable electricity consumption and CO2 emissions and between non-renewable electricity consumption, GDP and renewable electricity consumption. For the long-term causal relationship, the result indicates that there is bidirectional causality between non-renewable electricity consumption and CO2 emissions. However, there is evidence of unidirectional causal relationships from GDP to CO2 emissions and non-renewable electricity consumption and from renewable electricity consumption to CO2 emissions. The findings imply that non-renewable electricity consumption and economic growth stimulate CO2 emissions in southern and northern Mediterranean countries, while renewable electricity reduces them. This empirical evidence suggests that expansion of renewable energy sources is a viable strategy for addressing energy security and reducing carbon emissions to protect the environment for future generations. •We examine the dynamic relationship between CO2 emission and renewable electricity.•We employed cointegration technique allowing cross-section dependence among the panel.•Non-renewable electricity found to have a detrimental impact on the environment quality.•Whereas renewable found to have a positive effect on the environmental quality.•Expansion of renewable energy sources is a strategic plan enhance environmental quality.