Renewable Energy Distribution and Economic Growth in the U.S.

This study investigates linear and nonlinear causality among the industrial renewable energy consumption (IREC) sector, the residential and commercial renewable energy consumption (RCEC) sector, the transportation renewable energy consumption (TREC) sector, the electric power renewable energy consumption (EPEC) sector, and real GDP (RGDP) for the U.S. data from 1989 to 2008. The findings show (i) a bidirectional causality between IREC and RGDP, but neutrality among RCEC, TREC, EPEC, and RGDP regarding linear causality; (ii) a bidirectional causality between EPEC and RGDP, and an unidirectional causality among RCEC, TREC, and RGDP concerning nonlinear causality; and (iii) a greater renewable energy consumption demanding share represents a stronger causality relation with economic growth. Based on (i), (ii), and (iii), this work suggests that energy policy formulators could encourage more tax credits or rebates on IREC, TREC, and EPEC sectors to achieve economic growth.

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