A new approach to the renewable energy-growth nexus: evidence from the USA

Abstract

The climate change is one of the leading problems in the today's world. The rise of the renewable energy meets the sustainable growth objectives since it can decelerate the climate change. For this purpose, this paper investigates the relationship between the renewable energy consumption and the economic growth in the United States (USA). Theoretically, the paper constructs the growth model that captures the effects of the economic complexity indicator as a measure of capabilities and productivity for exporting the "complex" (high value-added) products. Empirically, the paper uses the Autoregressive Distributed Lag (ARDL) estimations and observes that both the economic complexity and the renewable energy consumption lead to a higher rate of economic growth in the USA for the period from 1965 to 2016. The paper also discusses the potential policy implications of the results for achieving the sustainable growth objectives.