Investigating the impact of renewable electricity consumption on sustainable economic development : a panel ARDL approach

During the 21^st century, humans are facing a major challenge of environmental degradation, including air pollutions and heatwaves; however, we need to concern about how to achieve sustainable economic development. Therefore, the scope of this study is to analyze the impact of renewable electricity consumption on economic growth and CO₂ emissions in newly industrialized countries over the period from 1994 to 2015 by applying the possible presence of cross-sectional dependence test, cross-sectional Augmented, and cross-sectional augmented Im-Pesaran-Shin unit root test, and Pooled Mean Group model. Results reveal that renewable electricity consumption is positive but statistically insignificant in explaining GDP while it contributes to mitigating the CO₂ emissions in the long run. The policy implication is that the governments of newly industrialized countries should realize the importance of renewable electricity consumption to ensure sustainable economic development and reduce the heavy reliance on nonrenewable electricity consumption.