Renewable and nonrenewable energy consumption and economic growth

What is it about?

With the advances in technology and the quest for environmental sustainability, renewable energy sources are becoming increasingly significant alternatives. At the same time, renewable energy sources in most developing and emerging economies are largely undeveloped, while simultaneously these countries are participating in a global transition to clean and low-carbon energy systems. Thus, the emerging issue for empirical investigation in energy-led economic growth literature is that whether a transition from nonrenewable energy to renewable energy can sustain economic growth in developing countries.

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Why is it important?

The nonrenewable energy consumption has a long-run significant positive effect on India’s economic growth. A bidirectional causality exists between nonrenewable energy use and economic growth in both the long run and short run. Based on these findings, it is suggested that a nonrenewable energy conservation policy may retard economic growth in India if initiated without due regard to renewable energy sources.

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