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The impact of global renewable energy demand on economic growth– evidence from GCCcountries
Date
2023-04-17
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Abstract
Purpose– This study aims to examine the relationship between global renewable energy consumption and
economic growth in Gulf Cooperation Council (GCC) countries from 2001 to 2019.
Design/methodology/approach–ThispaperusedapanelregressionmodeltostudythesixGCCcountries
over the period from 2001 to 2019.
Findings– As expected, the findings indicated a significant and negative relationship between global
renewable energy consumption and GCC economic growth. Additionally, there was a positive and significant
relationship between GCCeconomicgrowthandthecontrolvariables,specificallylabor, capital, CO2 emissions
and non-renewable energy production.
Practicalimplications–TheresultsareofgreatimportancetopolicymakersinGCCoil-exportingcountries,
as expected growth in renewable energy consumption will lower their economic growth in the future. Hence,
they should first diversify their economy and lower their dependence on oil. Second, these countries can invest
in solar energy throughinternational joint ventures, especially with North African countries in close proximity
to Europe, to become leaders in solar energy production.
Originality/value– How global energy consumption is related to GCC countries’ economic growth remains
unclear, not only in GCC countries but also in many oil-exporting countries around the world, so future studies
are needed. Furthermore, GCC governments will be able to create appropriate policies for the green economy
and achieve their objectives if they have a comprehensive understanding of how global growth in renewable
energy demand affects GCC economies.