Exploring the Relationship between Economic Development and Renewable Energy: An Empirical Study of the World’s Top 10 Economies

Megnath Routh; Anirban Ghosh; Amit Majumder

doi:10.58574/jaa.2024.v4.i1.17

Authors

Megnath Routh Assistant Professor, Dept. of Commerce, Sir Gurudas Mahavidyalaya, Kolkata, India
Anirban Ghosh Professor, Dept. of Commerce, Netaji Subhas Open University, Kolkata, India
Amit Majumder Associate Professor, Dept. of Commerce, Bijoy Krishna Girls’ College, Howrah, India

DOI:

https://doi.org/10.58574/jaa.2024.v4.i1.17

Keywords:

Renewable Energy, GDP, Renewable Energy Intensity, Richest Nations, Sustainable Development

Abstract

Renewable energy investment has experienced unprecedented growth globally, reflecting a massive shift towards clean and green energy solutions, which makes a transition away from fossil fuels. Over the past decade, financial flows into renewable energy technologies such as solar, wind, hydro, and geothermal have surged, driven by favourable policy frameworks, technological advancements, and growing environmental awareness. In 2023, global investment in renewable energy reached a record high of approximately $500 billion, with significant contributions from both public and private sectors. The study is conducted among the world's top 10 richest nations to explore the relationship between economic size (measured in terms of GDP) and deployment of renewable energy. While earlier studies reveal that countries with higher GDPs intend greater investment towards renewable energy generation and the intensity of renewable energy generation (as measured in terawatt-hours per trillion USD of GDP) has remained unstudied.

This research paper applies correlation and regression analysis to examine the relationship between GDP and (1) total renewable energy generation and (2) Intensity of renewable energy. The study reveals a significant and positive correlation between GDP and renewable energy generation, ensuring that economic size plays a crucial role in scaling clean and green infrastructure. However, the relationship between economic size (GDP) and intensity of renewable energy reflects an inverse relationship, highlighting some discrepancies in efficiency. This paper provides insight for sustainable development through balanced economic growth and environmental performance.

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