Identifying the factors that drive renewable energy consumption in the MENA region

Yıl 2023, Cilt: 6 Sayı: 2, 170 - 185, 31.07.2023

Sadık Aden Dırır

https://doi.org/10.58308/bemarej.1230694

Öz

The present study aims to identify the factors that drive renewable energy consumption in the MENA region. For this aim, the study employed panel data that consist of seven selected countries namely Algeria, Morocco, Egypt, Iraq, United Arab Emirates, Qatar, and Saudi Arabia from 2000 to 2021. The current study performed a Panel ARDL and causality test to determine the long-run effect of the variables and the direction of these effects. With that in mind, the study unveiled that energy importation and national income have a detrimental impact on renewable energy consumption while indicators such as inflation, government expenditure, economic growth, and industrial sector performance uncovered to rise the renewable energy consumption in MENA countries. Interestingly, the trade coefficient revealed no remarkable impact on the dependent variable. The results will offer insights to the MENA nations and the countries struggling to promote renewable energy consumption by identifying the factors that need to be prompted in order to increase the consumption of renewable energy and dissociate from non-renewable energy without compromising to achieve sustainable economic development. The paper also contributes to the literature by establishing a link between macroeconomic and microeconomic factors on energy consumption.

Anahtar Kelimeler

Renewable energy, Energy consumption, Energy output, Economic factors, MENA, income

MENA bölgesinde yenilenebilir enerji tüketimini yönlendiren faktörlerin belirlenmesi.

Öz

Bu çalışma, MENA bölgesinde yenilenebilir enerji tüketimini ve üretimini yönlendiren faktörleri belirlemeyi amaçlamaktadır. Bu amaçla, çalışmada 2000-2021 yılları arasında seçilen yedi ülkeden (Cezayir, Fas, Mısır, Irak, Birleşik Arap Emirlikleri, Katar ve Suudi Arabistan) oluşan panel veriler kullanılmıştır. ve endüstriyel katma değer, yenilenebilir enerji kullanımını olumlu yönde etkilemektedir. MENA ülkelerinde yenilenebilir enerji kullanımı ticaret, hükümet harcamaları, GSYİH, enflasyon ve enflasyondan olumsuz etkileniyor. Buna karşılık, yenilenebilir enerji üretimini inceleyen tüm modeller, MENA ülkelerinde gelir ve enerji ithalatının bu üretimi azalttığını, diğer faktörlerin ise artırdığını buldu. Sonuçlar, yenilenebilir enerji tüketimini artırmak ve sürdürülebilir ekonomik kalkınmayı sağlamaktan ödün vermeden yenilenemeyen enerjiden ayrışmak için harekete geçirilmesi gereken faktörleri belirleyerek yenilenebilir enerji tüketimini teşvik etmek için mücadele eden MENA ülkeleri ve ülkelere içgörü sunacak. . Çalışma, enerji tüketimi üzerindeki makroekonomik ve mikroekonomik faktörler arasında bir bağlantı kurarak literatüre katkıda bulunmaktadır.

Anahtar Kelimeler

Yenilenebilir enerji, Enerji tüketimi, Enerji çıkışı, Gelir, Ekonomik faktörler, MENA

Kaynakça

• Ahmed, M. M., & Shimada, K. (2019). The effect of renewable energy consumption on sustainable economic development: Evidence from emerging and developing economies. Energies, 12(15), 2954.
• Ahmed, W., & Sarkar, B. (2018). Impact of carbon emissions in a sustainable supply chain management for a second generation biofuel. Journal of Cleaner Production, 186, 807-820.
• Aïssa, M. S. B., Jebli, M. B., & Youssef, S. B. (2014). Output, renewable energy consumption and trade in Africa. Energy Policy, 66, 11-18.
• Akbar, M., Hussain, A., Akbar, A., & Ullah, I. (2021). The dynamic association between healthcare spending, CO2 emissions, and human development index in OECD countries: Evidence from panel VAR model. Environment, development and sustainability, 23(7), 10470-10489.
• Akın, T. (2019). The effects of political stability on foreign direct investment in fragile five countries. Central European Journal of Economic Modelling and Econometrics, 11(4), 237-255.
• Akarsu, G., & Gümüşoğlu, N. K. (2019). What are the main determinants of renewable energy consumption? A panel threshold regression approach. Anadolu Üniversitesi Sosyal Bilimler Dergisi, 19(2), 1-22.
• Alabi, O., Ackah, I., & Lartey, A. (2017). Re-visiting the renewable energy–economic growth nexus: Empirical evidence from African OPEC countries. International Journal of Energy Sector Management, 11(3), 387-403.
• Al-Mulali, U., Fereidouni, H. G., & Lee, J. Y. (2014). Electricity consumption from renewable and non-renewable sources and economic growth: Evidence from Latin American countries. Renewable and Sustainable Energy Reviews, 30, 290-298.
• Apergis, N., & Payne, J. E. (2012). Renewable and non-renewable energy consumption-growth nexus: Evidence from a panel error correction model. Energy economics, 34(3), 733-738.
• Armeanu, D. S., Joldes, C. C., Gherghina, S. C., & Andrei, J. V. (2021). Understanding the multidimensional linkages among renewable energy, pollution, economic growth and urbanization in contemporary economies: Quantitative assessments across different income countries’ groups. Renewable and Sustainable Energy Reviews, 142, 110818.
• Breusch, T. S., & Pagan, A. R. (1980). The Lagrange multiplier test and its applications to model specification in econometrics. The review of economic studies, 47(1), 239-253.
• Cadoret, I., & Padovano, F. (2016). The political drivers of renewable energies policies. Energy Economics, 56, 261-269.
• Cheng, C., Cherian, J., Sial, M. S., Zaman, U., & Niroumandi, H. (2021). Performance assessment of a novel biomass-based solid oxide fuel cell power generation cycle Economic analysis and optimization. Energy, 224, 120134.
• Chen, C., Pinar, M., & Stengos, T. (2021). Determinants of renewable energy consumption: Importance of democratic institutions. Renewable Energy, 179, 75-83.
• Choi, I. (2001). Unit root tests for panel data. Journal of international money and Finance, 20(2), 249-272.
• Dumitrescu, E. I., & Hurlin, C. (2012). Testing for Granger non-causality in heterogeneous panels. Economic modelling, 29(4), 1450-1460.
• Eren, B. M., Taspinar, N., & Gokmenoglu, K. K. (2019). The impact of financial development and economic growth on renewable energy consumption: Empirical analysis of India. Science of the Total Environment, 663, 189-197.
• Gujarati, D., & Porter, D. C. (2010). Functional forms of regression models. Essentials of Econometrics, 132-177.
• Gul, S., Zou, X., Hassan, C. H., Azam, M., & Zaman, K. (2015). Causal nexus between energy consumption and carbon dioxide emission for Malaysia using maximum entropy bootstrap approach. Environmental Science and Pollution Research, 22(24), 19773-19785.
• Henningsen, A., & Henningsen, G. (2019). Analysis of panel data using R. In Panel data econometrics (pp. 345-396). Academic Press.
• Hvelplund, F. (2013). Innovative democracy, political economy, and the transition to renewable energy. A full-scale experiment in Denmark 1976-2013. Environmental research, engineering and management, 66(4), 5-21.
• Kao, C. (1999). Spurious regression and residual-based tests for cointegration in panel data. Journal of Econometrics, 90(1), 1-44.
• Khan, M. K., Khan, M. I., & Rehan, M. (2020). The relationship between energy consumption, economic growth, and carbon dioxide emissions in Pakistan. Financial Innovation, 6(1), 1-13.
• Kocaarslan, B., & Soytas, U. (2019). Asymmetric pass-through between oil prices and the stock prices of clean energy firms: New evidence from the nonlinear analysis. Energy Reports, 5, 117-125.
• Kraft, J., & Kraft, A. (1978). On the relationship between energy and GNP. The Journal of Energy and Development, 3(2), 401-403.
• Lau, L. S., Yii, K. J., Lee, C. Y., Chong, Y. L., & Lee, E. H. (2018). Investigating the determinants of renewable energy consumption in Malaysia: An ARDL approach. International Journal of Business and Society, 19(3), 886-903.
• Lin, B., & Moubarak, M. (2014). Renewable energy consumption–economic growth nexus for China. Renewable and Sustainable Energy Reviews, 40, 111-117.
• Maddala, G. S., & Wu, S. (1999). A comparative study of unit root tests with panel data and a new simple test. Oxford Bulletin of Economics and statistics, 61(S1), 631-652.
• Menegaki, A. N. (2011). Growth and renewable energy in Europe: A random effect model with evidence for neutrality hypothesis. Energy economics, 33(2), 257-263.
• Muhammad, B. (2019). Energy consumption, CO2 emissions, and economic growth in developed, emerging, and Middle East and North African countries. Energy, 179, 232-245.
• Murshed, M. (2018). Does improvement in trade openness facilitate renewable energy transition? Evidence from selected South Asian economies. South Asia Economic Journal, 19(2), 151-170.
• Myers, R. H., & Myers, R. H. (1990). Classical and modern regression with applications (Vol. 2, p. 488). Duxbury press.
• Namahoro, J. P., Wu, Q., Zhou, N., & Xue, S. (2021). Impact of energy intensity, renewable energy, and economic growth on CO2 emissions: Evidence from Africa across regions and income levels. Renewable and Sustainable Energy Reviews, 147, 111233.
• Nathaniel, S., & Khan, S. A. R. (2020). The nexus between urbanization, renewable energy, trade, and ecological footprint in ASEAN countries. Journal of Cleaner Production, 272, 122709.
• Ozcan, B., & Ozturk, I. (2019). Renewable energy consumption-economic growth nexus in emerging countries: A bootstrap panel causality test. Renewable and Sustainable Energy Reviews, 104, 30-37.
• Ohler, A., & Fetters, I. (2014). The causal relationship between renewable electricity generation and GDP growth: A study of energy sources. Energy economics, 43, 125-139.
• Omri, A., Daly, S., & Nguyen, D. K. (2015). A robust analysis of the relationship between renewable energy consumption and its main drivers. Applied Economics, 47(28), 2913-2923.
• Pesaran, M. H., Shin, Y., & Smith, R. P. (1999). Pooled mean group estimation of dynamic heterogeneous panels. Journal of the American statistical Association, 94(446), 621-634.
• Pesaran, M. H., & Smith, R. (1995). Estimating long-run relationships from dynamic heterogeneous panels. Journal of econometrics, 68(1), 79-113.
• Pesaran, M. H. (2007). A simple panel unit root test in the presence of cross‐section dependence. Journal of applied econometrics, 22(2), 265-312.
• Pesaran, M. H. (2021). General diagnostic tests for cross-sectional dependence in panels. Empirical economics, 60(1), 13-50.
• Przychodzen, W., & Przychodzen, J. (2020). Determinants of renewable energy production in transition economies: A panel data approach. Energy, 191, 116583.
• Rahman, M. M., Rayhan, I., & Sultana, N. (2023). How does electricity affect economic growth? Examining the role of government policy to selected four south asian countries. Energies, 16(3), 1417.
• Rasoulinezhad, E., & Saboori, B. (2018). Panel estimation for renewable and non-renewable energy consumption, economic growth, CO 2 emissions, the composite trade intensity, and financial openness of the commonwealth of independent states. Environmental Science and Pollution Research, 25, 17354-17370.
• Sarkodie, S. A., & Strezov, V. (2019). Effect of foreign direct investments, economic development, and energy consumption on greenhouse gas emissions in developing countries. Science of the Total Environment, 646, 862-871.
• Salim, R. A., Hassan, K., & Shafiei, S. (2014). Renewable and non-renewable energy consumption and economic activities: Further evidence from OECD countries. Energy economics, 44, 350-360.
• Saibu, O. M., & Omoju, O. E. (2016). Macroeconomic determinants of renewable electricity technology adoption in Nigeria. Economic and Environmental Studies, 16(1), 65-83.
• Shah, S. Z., Chughtai, S., & Simonetti, B. (2020). Renewable energy, institutional stability, environment, and economic growth nexus of D-8 countries. Energy Strategy Reviews, 29, 100484.
• Shahbaz, M., Hye, Q. M. A., Tiwari, A. K., & Leitão, N. C. (2013). Economic growth, energy consumption, financial development, international trade, and CO2 emissions in Indonesia. Renewable and Sustainable Energy Reviews, 25, 109-121.
• Shahbaz, M., Loganathan, N., Zeshan, M., & Zaman, K. (2015). Does renewable energy consumption add in economic growth? An application of auto-regressive distributed lag model in Pakistan. Renewable and Sustainable Energy Reviews, 44, 576-585.
• Sharif, A., Raza, S. A., Ozturk, I., & Afshan, S. (2019). The dynamic relationship of renewable and nonrenewable energy consumption with carbon emission: A global study with the application of heterogeneous panel estimations. Renewable energy, 133, 685-691.
• Troster, V., Shahbaz, M., & Uddin, G. S. (2018). Renewable energy, oil prices, and economic activity: A Granger-causality in quantiles analysis. Energy Economics, 70, 440-452.