Spatial Growth Regressions for the convergence analysis of renewable energy consumption in Europe

Abstract

In recent years there has been an increasing awareness on problems related to the economic growth and on the conditions under which some socio-economic variables measured on European countries tend to converge over time towards a common level. This paper is concerned with the use of energy from renewable sources and considers the extent to which EU countries meet the binding commitment to reach a fifth of energy consumption from renewable sources by 2020. By discussing empirical results on the economic growth pattern of 28 countries in the period 1995-2010, we make use of several spatial growth regression models. We show that the proposed models are able to capture the complexity of the phenomenon including the possibility of estimating sitespecific convergence parameters and the identification of convergence clubs.

Keywords

• renewable energy consumption
• convergence analysis
• β-convergence model
• Spatial Growth Regressions
• conditional autoregressive processes