Renewable Energy and Economic Growth

Abstract

The global commitment to drastically curb greenhouse gas emissions towards a sustainable development is strongly connected to the development and usage of renewable energy (RE), such as solar and wind. Between 2006 and 2016, world's total RE consumption, excluding hydro-electricity, increased by almost 350%, and RE investment grew from US $47 billion in 2004 to 279.8 billion in 2017. The importance of RE has attracted a lot of attention from the economic literature as well, since a growing body of empirical research is investigating the relationships between RE and economic growth. The general outcome is the existence of a positive bi-directional (direct and reverse) link between RE consumption and real GDP, though it also emerges evidence showing no statistically significant relationship. This Chapter provides i) an overview of the recent world's trends of RE production and investment, ii) an extensive and detailed review of the recent advances in the RE-growth empirical literature, highlighting the main methodologies adopted and the main findings emerged.