The Effect of Renewable and Non-Renewable Energy Consumption on Economic Growth and Environment (A Comparison of Oil and Non-Oil Countries)

In recent decades, due to environmental pollution and the depletion of fossil fuel resources, the consumption of renewable energy sources has been increasing relative to non-renewable ones in many countries. The objective of this paper is to vigorously examine the impact of fossil and renewable energy consumption on economic growth and carbon dioxide (CO2) emissions, with a specific focus on oil-producing and non-oil-producing nations. In this research, 20 developing countries, including 10 oil-exporting nations and 10 non-oil-producing ones, were examined from 2000 to 2019 using panel data analysis, dynamic ordinary least squares, and Granger causality tests. The estimation results show that a 1 percent increase in renewable and non-renewable energy consumption, leads to an increase of 0.32 and 0.007 percent of GDP in oil-producing and 0.169 and 0.188 percent in non-oil-producing countries respectively. On the other hand, increased consumption of fossil fuels in oil-producing countries corresponds to an increase in carbon dioxide emissions, while the utilization of renewable energy sources in these countries leads to a decrease in CO2 emissions. Conversely, in non-oil-producing countries, an increase in the consumption of non-renewable energy sources is associated with elevated carbon dioxide emissions, while the incorporation of renewable energy sources leads to a reduction in CO2 emissions. The research results emphasize that endeavors to stimulate economic growth are accompanied by heightened carbon emissions and environmental degradation. Additionally, the findings highlight the significant role of renewable energy sources in controlling carbon dioxide emissions in both oil-rich and non-oil countries.Based on the results, a one percent increase in renewable and non-renewable energy consumption in both groups of countries leads to an increase in GDP. As an increase in fossil energy consumption in oil-producing countries rises the emission of carbon dioxide, and the use of renewable energy in this group of countries reduces the emission of carbon dioxide. In non-oil countries, the increase in the consumption of non-renewable energy rises the emission of carbon dioxide. Also, the consumption of renewable energy in this group of countries reduces the emission of carbon dioxide. The results of the present study show that in the studied countries, efforts to strengthen economic growth lead to increased carbon emissions and environmental degradation. The findings also indicate the positive effect of non-renewable energy sources on carbon dioxide emissions in both groups of oil-rich and non-oil countries and the positive effect of renewable sources on controlling carbon dioxide emissions.