Macroeconomic Analysis of Renewable Energy Consumption: A Panel Data Approach

The use of renewable energy sources enables the decarbonization of the economy. Moreover, the share of renewable energy in the global energy balance is growing. Government policymakers encourage increased investment in renewable energy generation capacity, even though the higher price of such energy compared with energy from traditional sources remains an obstacle to the complete abandonment of the use of fossil fuels for energy generation. This study examines the relationship between macroeconomic characteristics and energy consumption from renewable sources in 159 countries from 1990 to 2020. A positive association was identified between economic inequality and renewable energy consumption (a 1% increase in economic inequality was associated with a 0.58% increase in renewable energy consumption) and between GDP per capita and renewable energy consumption (a 1% increase in GDP per capita was associated with a 0.11% increase in renewable energy consumption). The negative association between economic inequality and the GDP per capita interaction with renewable energy consumption mitigates the use of energy from renewable sources in developing countries with high levels of economic inequality.