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Is Renewable Energy an Economic Boon or Bust in Addressing Global Warming Concerns?

Paper Reviewed
Antonakakis, N., Chatziantoniou, I. and Filis, G. 2017. Energy consumption, CO2 emissions, and economic growth: An ethical dilemma. Renewable and Sustainable Energy Reviews 68: 808-824.

Writing as background for their work, Antonakakis et al. (2017) note that "the link among energy consumption, emissions and economic growth has received considerable attention over the years by both policy makers and researchers, as the achievement of sustainable economic growth has gradually become a major global concern." Indeed, the energy-growth-emissions nexus is a focal point in the global warming debate, with climate alarmists calling for a reduction in energy production via fossil fuel sources by increasing the share of so-called low carbon renewable energies, such as wind, solar and biomass. By so doing, climate alarmists posit there will be a reduction in CO2 emissions (which emissions they contend are causing dangerous global warming) and that this reduction will come with little to no economic harm.

But is this contention correct?

As their contribution to the subject, Antonakakis et al. set out to answer this important question by examining "the dynamic interrelationship in the output-energy-environment nexus by applying panel vector autoregression (PVAR) and impulse response function analyses to data on energy consumption (and its subcomponents), carbon dioxide emissions and real GDP in 106 countries classified by different income groups over the period 1971-2011."

Limiting our discussion of their findings to the question of whether or not increased renewable energy use is an economic benefit, the three European researchers state that "we cannot report any statistically significant evidence that renewable energy consumption, in particular, is conducive to economic growth," which finding, in their words, "weakens the argument that renewable energy consumption is able to promote growth in a more efficient and environmentally sustainable way."

Further commenting on their analysis, Antonakakis et al. caution that "in light of these findings, the efficacy of recent government policies in various countries to promote renewable energy consumption as a means for sustainable growth is questioned," adding that to "put differently, there seems to be an ethical dilemma, between high economic growth rates and [fossil fuel use] and low or zero economic growth and [renewable energy use]."

Assuming the work of these authors is robust, it would appear that policies designed to promote renewable energies as a means to combat global warming are an economic bust.

Posted 3 May 2017