Sustainable consumption and green development
Wong, Siang Leng
Date of Issue2014
School of Humanities and Social Sciences
This thesis aims to contribute empirically the importance of renewable energy to economic growth. Renewable energy brings environmental sustainability but its influence on economic growth remains highly controversial. This thesis contributes to the literature of renewable energy and economic growth through the discussions of three related and yet distinct issues: (i) What is the contribution of renewable energy consumption and R&D to economic growth? (ii) How different types of energy consumption and energy R&D respond towards changes in economic growth and oil prices? (iii) Is there any causal relationship between energy consumption and energy R&D? Chapter 1 provides an overview of the literature and the motivation of this thesis. The relationship between energy and economic growth is discussed. A central puzzle in energy economics is to deal with the relationship between energy consumption and economic growth and recently, studies have begun to explore the importance of renewable energy consumption in promoting economic growth but neglected the influence of energy R&D on economic growth. Chapter 2 of this thesis hence fills this gap and examines the relationship between both energy consumption and energy R&D with economic growth. Using the Fully-Modified Ordinary Least Squares (FMOLS) estimator and a Dynamic Ordinary Least Squares (DOLS) estimator, this chapter finds that while capital stock and fossil fuels are the key factors driving economic growth, both renewable energy consumption and renewable energy R&D have the potential to promote real output, especially amongst the countries without oil reserves. While Chapter 2 examines the renewable energy and economic growth nexus, Chapter 3 studies the short-run and long-run elasticities of various energy consumption and energy R&D to change in oil prices and income. Using the Nerlove Partial Adjustment Model (NPAM), this chapter finds that economic growth is the main factor to promote cleaner forms of energy consumption, from coal to oil, gas and renewable energy. Energy consumption and energy R&D could have potential bilateral causality and Chapter 4 goes a step further in the examination of the factors which promote energy consumption or energy R&D by also examining the dynamic relationship between energy consumption and energy R&D, which is found missing in literature. As gas consumption becomes more important and climatic policies could also play a role in influencing energy consumption or R&D, gas prices and time dummies are included in the regressions. To facilitate the shift towards renewable energy-based economies, this chapter shows that countries could implement policies such as subsidies for renewable energy R&D and removal of subsidies for fossil fuel-related R&D. Chapter 5 summarizes the key findings of this thesis and explores the potential of future extension.
DRNTU::Social sciences::Economic theory::Macroeconomics