Please enter verification code
Renewable Energy Consumption, CO2 Emissions and Economic Growth: A Case of Jordan
International Journal of Business and Economics Research
Volume 5, Issue 6, December 2016, Pages: 217-226
Received: Oct. 19, 2016; Accepted: Oct. 31, 2016; Published: Nov. 23, 2016
Views 3695      Downloads 253
Khawlah Ali Ahmed AbdAlla Spetan, Department of Business Economics, the University of Jordan, Amman, Jordan
Article Tools
Follow on us
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.
Jordan, Renewable Energy Consumption, CO2, Economic Growth, Granger Causality, VECM
To cite this article
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. doi: 10.11648/j.ijber.20160506.15
Copyright © 2016 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License ( which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Acaravci A. and Ozturk I., 2012. "Electricity consumption economic growth nexus: a multivariate analysis of Turkey". Amfiteatru Economic 14(31), 246–257.
Adom Ph. K., 2011. "Electricity-Economic growth nexus: the Ghanaian case." International Journal of Energy Economics and Policy, vol. 1, no. 1, 18-31.
Ajlouni S., 2015."Energy consumption and economic growth in Jordan: An ARDL bounds testing approach to cointegration". Jordan Journal of Economic Sciences, vol. 2, no. 2, 143-154.
Al-Zeaud A. H., 2014. "The causal relationship between energy consumption and economic growth case of Jordan". Interdisciplinary Journal of Contemporary Research in Business, vol. 6, no. 5, 203-216.
Apergis N. and Danuletiu D. C., 2014. "Renewable energy and economic growth: evidence from the sign of panel long-run causality." International Journal of Energy Economics and Policy, vol. 4, no. 4, 578-587.
Apergis N. and Payne J. E., 2010. "Renewable energy and growth in Eurasia." Energy Economics, 32, 1392-1397.
Apergis, N. and Payne, J. E., 2010b. "Renewable energy consumption and economic growth: evidence from a panel of OECD countries". Energy Policy, 38, 656–660.
Behboudi D., Panahi H. and Moosavi S., 2013. "An Investigation of the contribution of renewable and non-renewable energy consumtion to economic growth in OIC countries". International Journal of Economics, Management, and Accounting 21, (2), 45-57.
Farhani S., 2015. "Renewable energy consumption, economic growth and CO2 emission: evidence from selected MENA countries." IPAG Business School unpublished paper.
Harris R. and Sollis R, 2003. "Applied Time Series Modeling and Forecasting", 1st edition, Wiley.
Hjalmarsson E. and Österholm P, 2007. "Testing for Cointegration Using the Johansen Methodology when Variables are Near-Integrated", IMF Working Paper, WP/07/141, 2007.
Hung-Pin L., 2014. "Renewable Energy Consumption and Economic Growth in Nine OECD Countries: Bounds Test Approach and Causality Analysis". The Scientific World Journal, vol. 2014, Article ID 919167, 6 pages.
Lee Ch. and Chang Ch. P, 2008. "Energy consumption and economic growth in Asian economies: A more comprehensive analysis using panel data."Resource and Energy Economics 30, 50-65.
Lee Ch.-Ch., 2004. "Energy consumption and GDP in developing countries: A cointegrated panel analysis", Energy economics, 27, 415-427.
Leitao C. N., 2014. "Economic growth, carbon dioxide emissions, renewable energy and globalization". International Journal of Energy Economics and Policy vol. 4 (3), 391-399.
Lise W. and Van Montfort K., 2005. "Energy consumption and GDP in Turkey: Is there a cointegration relationship?" EcoMod2005 International conference on policy modeling, Jun 29-Jul 2, Istanbul, Turkey.
Menegaki A. N., 2011. "Growth and renewable energy in Europe: A random effect model with evidence for neutrality hypothesis". Energy Economics 33, 257-263.
Nnaji, E. Ch, Chukwu o. J. and Moses N., 2013. "Electricity supply, fossil fuel consumption, Coemissions and economic growth: implications and policy options for sustainable development in Nigeria". International Journal of Energy Economics and Policy, vol. 3, no. 3, 262-271.
Osigwe A. C. and Arawomo D. F., 2015. "Energy consumption, energy prices and economic growth: causal relationships based on error correction model." International Journal of Energy Economics and Policy, vol. 5, no. 2, 408-414.
Payne, J. E., 2010b. "A survey of the electricity consumption-growth literature." Applied energy 87, 723–731.
Payne J. E., 2009. "On the dynamics of energy consumption and output in the U.S.". Applied Energy, 86, 575-577.
Rufael W. Y., 2006. "Electricity consumption and economic growth: a time series experience for 17 African countries". Energy Policy, vol. 34, 1106-1114.
Rufael W. Y. and Menyah K., 2010. "Nuclear energy consumption and economic growth in nine developed countries". Energy Economics, vol. 32, 550-556.
Shahateet M. I. and Al-Majali K. A. & Al-Hahabashneh F., 2014. "Causality and Cointegration between Economic Growth and Energy Consumption: Econometric Evidence from Jordan". International Journal of Economics and Finance, vol. 6, No. 10, 270-279.
Shahbaz M., Bhattacharya M. and Ahmed Kh. "Growt-Globalization-Emissions Nexus: The Role of Population in Australia", Department of Economics, Monash business School, ISSN 1441-5429, Discussion Paper 23/15, 1-31.
Sliva S., Soares I. and Pinho C., March, 2011. "The Impact of renewable energy sources on economic growth and emissions-A SVAR approach", FEP working papers, No.407, 1-25.
Spetan Kh. A., Al-Salaymeh A., Mahmoud M., Elkhayat M. and Abu-Jeries A., 2015, "A guide to Renewable Energy in Egypt and Jordan", Friedrich Ebert Stiftung, 1st edit., Amman, Jordan, 126-169.
Squalli J. and Wilson K., 2006. "A Bounds analysis of electricity consumption and economic growth in the GCC". Working Paper No. 06-09, EPRU, Zayed University.
The World Bank, World Development Indicators,
Ucan O., Aricioglu E. and Yucel F., 2014. "Energy consumption and economic growth nexus: evidence from development countries in Europe." International Journal of Energy, Economics and Policy, vol. 4, no. 3, 411-419.
Science Publishing Group
1 Rockefeller Plaza,
10th and 11th Floors,
New York, NY 10020
Tel: (001)347-983-5186