This study inspects the causal relationship between renewable energy consumption, CO2 emissions, labor, capital and economic growth for Jordan over the period 1986-2012 within a multivariate framework. The time series cointegration test suggests a long-run equilibrium relationship among real GDP, renewable energy consumption, real gross fixed capital formation and labor force. The outcomes of the error correction models reveal that there is a unidirectional causality running from renewable energy consumption to real GDP. Also there is a unidirectional causality running from renewable energy consumption to carbon dioxide while unidirectional causality is revealed from real GDP to capital and finally bidirectional causality is detected between capital and renewable energy consumption in the short-run. Furthermore the error correction terms indicate that there is a long-run bidirectional causality between the variables except for labor model which is statistically insignificant. In addition the outcomes revealed that an increase in the usage of renewable energy has a desirable effect on environment as it reduces the CO2 emissions.
Khawlah Ali Ahmed AbdAlla Spetan,
Renewable Energy Consumption, CO2 Emissions and Economic Growth: A Case of Jordan, International Journal of Business and Economics Research.
Vol. 5, No. 6,
2016, pp. 217-226.
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