Renewable Energy Consumption Convergence in G-7 Countries

Abstract

This study examines the convergence of renewable energy consumption in G-7 countries. We employ LM unit root and RALS version of LM unit root tests with endogenously determined with structural one or two breaks. Despite the increase in renewable energy consumption in G-7 countries, it is important to identify whether renewable energy consumption converges across these countries to formulate appropriate policies to support sustainable energy consumption and reduce CO2 emissions. Our analysis indicated that Germany, Italy, and Canada exhibit evidence of convergence. However, after employing both the LM and RALS versions of the LM unit root tests, which consider level shifts with one or two breaks or trend shifts with one or two breaks, we found that there is no evidence of convergence for France, Japan, and the United Kingdom. Overall, our results highlight the importance of formulating country-specific policies to support renewable energy consumption and reduce CO2 emissions. Policymakers need to identify the drivers of renewable energy consumption and adopt appropriate measures to ensure that the countries can meet their climate goals while also ensuring energy security.

Keywords

• Renewable Energy, G-7 Countries, Convergence