Renewable and Fossil Fuel Energy Consumption, Country/Continent Premiums, and Rankings

In this paper, we develop a methodology for ranking countries and continents in their use of renewable energy. We then rank the countries and continents by using data for 150 countries over the period 1990–2019. The methodology involves calculating country and continent premiums in the use of renewable energy using regression analysis. South America comes the best in terms of renewable energy consumption with Paraguay taking the lead, and Europe comes second with Iceland taking the lead. Since in calculating the premiums, we control for per-capita gross domestic product, using cubic specifications we are also able to confirm the existence of an inverted N-shaped Environment Kuznets curve. The paper then tries to make a distinction between clean and dirty sources of renewable energy as robustness checks. Our findings suggest that since the use of renewable energy is vital for a sustainable environment, there is a need for greater financial development and interventions by governments to ensure that environmental quality could improve with income, given that the technical effect that comes with the relationship between income and environment quality has been shown in the literature to overshadow the scale effect. Significant heterogeneity among countries that we have found in this paper also suggests that countries can learn from each other for the benefit of everyone.