Renewable energy consumption

Considering global warming and importance of sustainable growth in economic sub-sectors, this paper presents and estimates an empirical model of renewable energy consumption for the industrial sector of selected OPEC and non-OPEC countries over the period 1990-2014. Panel co-integration estimates by Pedroni (1999,2004) and Westerlund (2005,2006) show that, in the long term, increases in industrial value added per capita, real oil prices, and CO2 per capita are found to be major drivers behind per capita renewable energy consumption for both OPEC and Non-OPEC nations. Panel Granger causality by the Dumitrescu and Hurlin (2012) method confirms that there are bi-directional causality relationship between research variables and therefore verify feedback hypothesis. Finally, FMOLS and DOLS results show that when industrial value added per person increases, per capital renewable energy consumption increases by greater magnitude in non-OPEC than OPEC countries; also an increase in CO2 emissions per person increases per capita renewable energy consumption by greater amount in non-OPEC than OPEC nations.

This paper aims at defining the green economy index and using econometric models in order to investigate the relationship between the consumption of renewable energy in Egypt’s transition to a green economy. Results indicate that first, consumption of renewable energy can effectively increase the level of development of green economy in the short and long term. Second, improving capital spending and increasing employment leads to an increase in the green economy index. Third, the effect of non-renewable energy on the green economy index is inverse, although there is a direct relationship between non-renewable energy consumption and total energy consumption. Therefore, it is necessary to consider the green credit policy of the government and financial institutions in order to maximize the enhanced effect of renewable energy investment on the green economy. The government must therefore develop a series of incentive measures to support and encourage investment in financing renewable energy, pay attention to the fundamental and guiding role of large enterprises in promoting renewable energy consumption and the development of the green economy, and fully mobilize the enthusiasm of all types of enterprises in promoting the development of the green economy.