Energy consumption and economic growth in the light of meeting the targets of energy policy in the EU

Abstract

The aim of the paper is to assess linkages between energy consumption and economic growth in the light of compliance with the EU energy policy targets stated in the climate and energy package for 2020 in the European Union member states in the period 1993-2011. The study is divided into two main stages. During the first one, using cluster analysis methods, four groups of countries which met three energy policy targets stated in the package at similar levels were identified. During the second stage, the bootstrap Granger panel causality approach proposed by Konya [9] was used to verify the hypothesis of energy-growth nexus in the countries from the groups. The results obtained reveal that the level of compliance with energy policy targets influences linkages between energy consumption and economic growth. Causal relations were found in the group of countries with the greatest improvements on the EU energy policy targets.