The Paradoxical Relationship between Renewable Energy and Economic Growth: A Cross-National Panel Study, 1990-2013
Keywords:Climate Change, Economic Growth, Renewable Energy Consumption, Renewable Energy Paradox, World Economic System
This cross-national study employs a time-series cross-sectional Prais-Winsten regression model with panel-corrected standard errors to examine the relationship between renewable energy consumption and economic growth, and its impact on total carbon dioxide emissions and carbon dioxide emissions per unit of GDP. Findings indicate that renewable energy consumption has its largest negative effect on total carbon emissions and carbon emissions per unit of GDP in low-income countries. Contrary to conventional wisdom, renewable energy has little influence on total carbon dioxide emissions or carbon dioxide emissions per unit of GDP at high levels of GDP per capita. The findings of this study indicate the presence of a “renewable energy paradox,” where economic growth becomes increasingly coupled with carbon emissions at high levels of renewable energy, and the negative effect of economic growth on carbon emissions per unit of GDP lessens as renewable energy increases. These findings suggest that public policy should be directed at deploying renewable energy in developing countries, while focusing on non-or-de-growth strategies accompanied with renewable energy in developed nations.
Ackerman, Frank and Elizabeth Stanton. 2012. “Climate Risks and Carbon Prices: Revising the Social Cost of Carbon.” Economics: The Open-Access, Open-Assessment E-Journal 6: 1- 25.
Apergis, Nicholas and James E. Payne. 2010. “Renewable Energy Consumption and Economic Growth: Evidence from a Panel of OECD Countries.” Energy Policy 38(1): 656-660.
Baum, Christopher F. 2006. An Introduction to Modern Econometrics Using Stata. College Station: Stata Press.
Beck, Nathaniel and Jonathan N. Katz. 1995. “What to Do (and Not Do) with Time-Series Cross-Section Data.” American Political Science Review 89: 634–47.
Ben Aissa, Mohamed Safouane, Mehdi Ben Jebli, and Slim Ben Youssef. 2014. “Output, Renewable Energy Consumption and Trade in Africa.” Energy Policy 66: 11-18.
Bunker, Stephen G. 1984. “Modes of Extraction, Unequal Exchange, and the Progressive Underdevelopment of an Extreme Periphery: The Brazilian Amazon, 1600-1980.” American Journal of Sociology 89(5): 1017-1064.
Chase-Dunn, Christopher. 1975. “The Effects of International Economic Dependence on Development and Inequality: A Cross-National Study.” American Sociological Review 40(6): 720-738.
Clark, Brett, Andrew K. Jorgenson, and Jeffrey Kentor. 2010. “Militarization and Energy Consumption: A Test of Treadmill of Destruction Theory in Comparative Perspective.” International Journal of Sociology 40(2): 23-43.
Clark, Brett and John Bellamy Foster. 2009. “Ecological Imperialism and the Global Metabolic Rift: Unequal Exchange and the Guano/Nitrates Trade.” International Journal of Comparative Sociology 50(3-4): 311-334.
Daly, Herman E. and John B. Cobb. 1989. For the Common Good: Redirecting the Economy Toward Community, the Environment, and a Sustainable Future. Boston, MA: Beacon Press.
Dietz, Thomas, Eugene A. Rosa, and Richard York. 2007. “Driving the Human Ecological Footprint.” Frontiers in Ecology and the Environment 5(1): 13-18.
Dubois, Emilie A., Juliet B. Schor, and Lindsey B. Carfagna. 2014. “New Cultures of Connection in a Boston Time Bank.” Pp. 95-124 in Sustainable Lifestyles and The Quest for Plentitude: Case Studies of the New Economy, edited by Juliet B. Schor. New Haven, CT: Yale University Press.
Environmental Protection Agency (EPA). 2017. “The Social Cost of Carbon: Estimating the Benefits of Reducing Greenhouse Gas Emissions.” Retrieved July 14, 2017 (https://19january2017snapshot.epa.gov/climatechange/social-cost-carbon_.html).
Ewing, Jeffrey A. 2017. “Hollow Ecology: Ecological Modernization and the Death of Nature.” Journal of World-Systems Research 23(1): 126-155.
Foster, John Bellamy. 1999. “Marx’s Theory of Metabolic Rift: Classical Foundations for Environmental Sociology.” The American Journal of Sociology 105(2): 366-405.
Foster, John Bellamy, Brett Clark, and Richard York. 2010. The Ecological Rift: Capitalism’s War on the Earth. Monthly Review Press: New York.
Frey, R. Scott. 2003. “The Transfer of Core-Based Hazardous Production Processes to the Export Processing Zones of the Periphery: The Maquiladora Centers of Northern Mexico.” Journal of World-Systems Research 9(2): 317-354.
Gould, Kenneth A., David N. Pellow, and Allan Schnaiberg. 2004. “Interrogating the Treadmill of Production: Everything You Wanted to Know About the Treadmill but were Afraid to Ask.” Organization and Environment 17(3): 296–316.
Grossman, Gene M. and Alan B. Krueger. 1995. “Economic Growth and the Environment.” The Quarterly Journal of Economics 110(2): 353-377.
Intergovernmental Panel on Climate Change (IPCC). 2014a. Climate Change 2014 Synthesis
Report: Summary for Policy Makers. Retrieved March 4, 2017 (https://www.ipcc.ch/pdf/assessment-report/ar5/syr/AR5_SYR_FINAL_SPM.pdf)
Intergovernmental Panel on Climate Change (IPCC). 2014b. Summary for Policy Makers: Working Group III. Retrieved March 4, 2017 (http://www.ipcc.ch/pdf/assessment-report/ar5/wg3/ipcc_wg3_ar5_summary-for-policymakers.pdf).
Jaccard, James, Choi K. Wan, and Robert Turrisi. 1990. “The Detection and Interpretation of Interaction Effects Between Continuous Variables in Multiple Regression.” Multivariate Behavioral Research 25(4): 467-478.
Jorgenson, Andrew K. 2006. “The Transnational Organization of Production and Environmental Degradation: A Cross-National Study of the Effects of Foreign Capital Penetration on Organic Water Pollution Intensity, 1980–1995.” Social Science Quarterly 87: 711-730.
Jorgenson, Andrew K. 2009. “The Transnational Organization of Production, the Scale of Degradation, and Ecoefficiency: A Study of Carbon Dioxide Emissions in Less-Developed Countries. Human Ecology Review 16(1): 64-74.
Jorgenson, Andrew K. 2016. “Environment, Development, and Ecologically Unequal Exchange.” Sustainability 8(3): 1-15.
Jorgenson, Andrew K., Brett Clark, and Jeffrey Kentor. 2010. “Militarization and the Environment: A Panel Study of Carbon Dioxide Emissions and the Ecological Footprints of Nations, 1970–2000.” Global Environmental Politics 10(1): 7-29.
Jorgenson, Andrew K., James Rice, and Brett Clark. 2010. “Cities, Slums, and Energy Consumption in Less-Developed Countries, 1990–2005.” Organization and Environment 23: 189–204.
Jorgenson, Andrew K. and Brett Clark. 2011. “Societies Consuming Nature: A Panel Study of the Ecological Footprints of Nations, 1960–2003.” Social Science Research 40(1): 226-244.
Jorgenson, Andrew K. and Brett Clark. 2012. “Are the Economy and the Environment Decoupling? A Comparative International Study, 1960-2005.” The American Journal of Sociology 118(1): 1-44.
Jorgenson, Andrew K., Brett Clark, and Vincentas R. Giedraitis. 2012. "The Temporal (In) Stability of the Carbon Dioxide Emissions/Economic Development Relationship in Central and Eastern European Nations." Society & Natural Resources 25(11): 1182-1192.
Jorgenson, Andrew K. and Thomas Dietz. 2015. “Economic Growth Does Not Reduce the Ecological Intensity of Human Well-Being.” Sustainability Science 10(1): 149-156.
Kallis, Giorgos, Christian Kerschner, and Joan Martinez-Alier. 2012. “The Economics of Degrowth.” Ecological Economics 84: 172-180.
Kentor, Jeff, and Peter Grimes. 2006. “Foreign Investment Dependence and the Environment: A Global Perspective.” Pp. 61-78 in Globalization and the Environment, edited by Andrew K. Jorgenson and Edward Kick. Netherlands: Brill Academic Press.
Knight, Kyle, Eugene Rosa, and Juliet Schor. 2013. “Could Working Less Reduce Pressures on the Environment?: A Cross-national Panel Analysis of OECD countries, 1970-2007.” Global Environmental Change 23: 691-700.
Lankao, Paty Romero, Doug Nychka, and John L. Tribbia. 2008. “Development and Greenhouse Gas Emissions Deviate from the ‘Modernization’ Theory and ‘Convergence’ Hypothesis.” Climate Research 38: 17–29.
Lovins, L. Hunter, and Amory B. Lovins. 2000. “Pathway to Sustainability.” Forum for Applied Research and Public Policy 15(4): 13-22.
Mol, Arthur P.J. 2002. “Ecological Modernization and the Global Economy.” Global Environmental Politics 2(2): 92–115.
National Conference of State Legislatures (NCSL). 2016. “State Renewable Portfolio Standards and Goals.” Retrieved March 4, 2017 (http://www.ncsl.org/research/energy/renewable-portfolio-standards.aspx).
Obama, Barack. 2017. “The Irreversible Momentum of Clean Energy.” Science: 1-4.
Organization for Economic Co-operation and Development (OECD). 2002. “Indicators to Measure Decoupling of Environmental Pressure from Economic Growth.” Retrieved May 12, 2017 (http://www.oecd.org/environment/indicators-modelling-outlooks/1933638.pdf).
Organization for Economic Co-operation and Development (OECD). 2011. OECD Green Growth Strategies: Energy. Retrieved March 4, 2017 (http://www.oecd.org/greengrowth/greening-energy/49157219.pdf accessed).
OECD, World Bank, United Nations. 2012. Incorporating Green Growth and Sustainable Development Policies into Structural Reform Agendas. Retrieved March 4, 2017 (https://www.oecd.org/g20/topics/energy-environment-green-growth/G20_report_on_GG_and_SD_final.pdf).
Rice, James. 2007. “Ecological Unequal Exchange: International Trade and Uneven Utilization of Environmental Space in the World System.” Social Forces 85(3): 1369-1392.
Rosa, Eugene A., Richard York, and Thomas Dietz. 2004. “Tracking the Anthropogenic Drivers of Ecological Impacts.” Ambio 33(8): 509-512.
Roberts, Timmons, Peter Grimes, and Jodie Manale. 2003. “Social Roots of Global
Environmental Change: A World-Systems Analysis of Carbon Dioxide Emissions.”
Journal of World-Systems Research 9: 277–315.
Roberts, J. Timmons, and Bradley C. Parks. 2007. A Climate of Injustice: Global Inequality,
North-South Politics, and Climate Policy. Cambridge: MIT Press.
Rockström, Johan, Will Steffen, Kevin Noone, Asa Perrson, F. Stuart Chappin III, Eric Lambin, Timothy M. Lenton, Marten Scheffer, Carl Folke, Hans Joachim Schellnhuber, Bjorn Nykvist, Cynthia A. de Wit, Terry Hughes, Sander van der Leeuw, Henning Rodhe, Sverker Sörlin, Peter K. Snyder, Robert Costanza, Uno Svedin, Malin Falkenmark, Louise Karlberg, Robert W. Corell, Victoria J. Fabry, James Hansen, Brian Walker, Diana Liverman, Katherine Richardson, Paul Crutzen, and Jonathan Foley. 2009. “Planetary Boundaries: Exploring the Safe Operating Space for Humanity.” Ecology and Society 14(2): 1-33.
Salleh, Ariel. 2012. “Green Economy or Green Utopia? Rio+20 and the Reproductive Labor Class.” Journal of World-Systems Research 18(2): 141-145.
Schor, Juliet. 2015. "Climate, Inequality, and the Need for Reframing Climate Policy." Review of Radical Political Economics 47(4): 525-536.
Shafiei, Sahar, and Ruhul A. Salim. 2014. “Non-renewable and Renewable Energy Consumption and CO2 emissions in OECD countries: A comparative analysis.” Energy Policy 66: 547- 556.
Stockholm International Peace Research Institute. 2017. “SIPRI Military Expenditure Database” Retrieved April 19, 2017 (https://www.sipri.org/databases/milex).
STATA., n.d. “Margins.” Retrieved March 4, 2017 (http://www.stata.com/manuals13/rmargins.pdf).
Wolff, Richard. 2012. Democracy at Work: A Cure for Capitalism. Chicago: Haymarket Books.
World Bank. 1992. World Development Report 1992: Development and the Environment. Retrieved March 4, 2017 (https://openknowledge.worldbank.org/handle/10986/5975).
World Bank., 2010. World Development Report 2010: Development and Climate Change. Retrieved March 4, 2017 (http://siteresources.worldbank.org/INTWDR2010/Resources/52876781226014527953/ WDR10-Full-Text.pdf).
World Bank. 2017a. “World Bank Country and Lending Groups.” Retrieved March 4, 2017 (https://datahelpdesk.worldbank.org/knowledgebase/articles/906519).
World Bank., 2017b. “World Development Indicators.” Retrieved March 4, 2017 (http://databank.worldbank.org/data/reports.aspx?source=world-development- indicators&preview=on).
World Bank., 2017c. “Industry, Value Added (% of GDP).” Retrieved March 4, 2017 (http://databank.worldbank.org/data/reports.aspx?source=2&type=metadata&series=NV.I ND.TOTL.ZS).
World Resources Institute, Center for Advanced Infrastructure and Transportation (WRI, CAIT).
n.d. “Frequently Asked Questions.” Retrieved March 4, 2017 (http://cait.wri.org/faq.html).
World Resources Institute (WRI), Center for Advanced Infrastructure and Transportation (CAIT). 2017. “Climate Analysis Indicators Tool: WRI’s Climate Data Explorer.” Retrieved March 4, 2017 (http://www.wri.org/resources/data-sets/cait-historical-emissions-data-countries-us-states-unfccc).
York, Richard. 2008. “De-Carbonization in Former Soviet Republics, 1992–2000: The Ecological Consequences of De-modernization.” Social Problems 55: 370–90.
York, Richard. 2012. “Do Alternative Energy Sources Displace Fossil Fuels?” Nature Climate Change 2: 441-443.
York, Richard, Eugene A. Rosa, and Thomas Dietz. 2003. “Footprints on the Earth: The Environmental Consequences of Modernity.” American Sociological Review 68: 279–300.
York, Richard, Eugene A. Rosa, and Thomas Dietz. 2009. “A Tale of Contrasting Trends: Three Measures of the Ecological Footprint in China, India, Japan, and the United States, 1961– 2003.” Journal of World- Systems Research 15:134–46.
York, Richard and Julius Alexander Mcgee. 2017. “Does Renewable Energy Development Decouple Economic Growth from CO2 Emissions?” Socius 3: 1-6.
How to Cite
Authors who publish with this journal agree to the following terms:
- The Author retains copyright in the Work, where the term “Work” shall include all digital objects that may result in subsequent electronic publication or distribution.
- Upon acceptance of the Work, the author shall grant to the Publisher the right of first publication of the Work.
- The Author shall grant to the Publisher and its agents the nonexclusive perpetual right and license to publish, archive, and make accessible the Work in whole or in part in all forms of media now or hereafter known under a Creative Commons Attribution 4.0 International License or its equivalent, which, for the avoidance of doubt, allows others to copy, distribute, and transmit the Work under the following conditions:
- Attribution—other users must attribute the Work in the manner specified by the author as indicated on the journal Web site;
- The Author is able to enter into separate, additional contractual arrangements for the nonexclusive distribution of the journal's published version of the Work (e.g., post it to an institutional repository or publish it in a book), as long as there is provided in the document an acknowledgement of its initial publication in this journal.
- Authors are permitted and encouraged to post online a prepublication manuscript (but not the Publisher’s final formatted PDF version of the Work) in institutional repositories or on their Websites prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work. Any such posting made before acceptance and publication of the Work shall be updated upon publication to include a reference to the Publisher-assigned DOI (Digital Object Identifier) and a link to the online abstract for the final published Work in the Journal.
- Upon Publisher’s request, the Author agrees to furnish promptly to Publisher, at the Author’s own expense, written evidence of the permissions, licenses, and consents for use of third-party material included within the Work, except as determined by Publisher to be covered by the principles of Fair Use.
- The Author represents and warrants that:
- the Work is the Author’s original work;
- the Author has not transferred, and will not transfer, exclusive rights in the Work to any third party;
- the Work is not pending review or under consideration by another publisher;
- the Work has not previously been published;
- the Work contains no misrepresentation or infringement of the Work or property of other authors or third parties; and
- the Work contains no libel, invasion of privacy, or other unlawful matter.
- The Author agrees to indemnify and hold Publisher harmless from Author’s breach of the representations and warranties contained in Paragraph 6 above, as well as any claim or proceeding relating to Publisher’s use and publication of any content contained in the Work, including third-party content.
Revised 7/16/2018. Revision Description: Removed outdated link.