Abstract
Over recent years, renewable energy sources have emerged as an important component of world energy consumption. Little is however known about the determinants of renewable energy consumption. This article tackles this issue for a global panel consisting of 64 countries over the period 1990–2011 by using a dynamic system-GMM panel model. We also consider three homogenous subpanels which are constructed based on the income level of sample countries (high-, middle-, and low-income subpanels). We mainly find that the increases in CO2 emissions and trade openness are the major drivers of renewable energy consumption. Oil price increases have a smaller but negative impact on renewable energy consumption in the middle-income and global panels. Policy implications of our results are also discussed.
•We examine the determinants of renewable energy consumption.•We use a dynamic panel model for a panel of 64 countries over the period 1990–2011.•We also consider three subpanels which are constructed based on the income level.•We find that CO2 emissions and trade openness are the major drivers of renewable energy.