What are the Main Determinants of Renewable Energy Consumption? A Panel Threshold Regression Approach

İngilizce (OpenAlex)

Because of severe environmental impacts associated with the use of conventional energy sources, most of the countries attempt to decarbonize their energy sector by increasing share of renewable energy in their total energy consumption which also reduces their energy import dependency. Therefore, this study aims to understand the determinants of renewable energy consumption for 58 countries over the period from 1990 to 2012. The period and number of countries are determined based on the data availability for all the variables. For example, data on total greenhouse gas emissions is available only up to 2012. Analysis is based on a panel threshold regression model to find out asymmetric behavior of renewable energy consumption. The model explains renewable energy consumption by various economic factors in a nonlinear framework. Different effects of these factors are expected under different economic regimes characterized by income level. Results show that for real GDP per capita lower than 1527.977 US$, signs, statistical significance and magnitude of coefficients on some variables differ tremendously compared to the upper regime verifying the asymmetric relationship. Therefore, one can conclude that determinants of renewable energy consumption differ across countries and time based on the real GDP per capita level.