Evaluating the relationship between renewable energy consumption and economic growth in Vietnam, 1995–2019

Abstract

The use of nonrenewable energy sources of fossil fuel and coal is the main cause of climate change; therefore, renewable energy sources have emerged as a viable option for reducing pollution. This study examines the link between real gross domestic product and renewable energy use and by adding determinants of production function in Vietnam such as capital and labor by using annual data of the period 1995–2019. This study uses the autoregressive distributed lag model (ARDL) to evaluate the link between renewable energy consumption, labor, economic growth, and capital in the long term and to determine causality using the Granger causality test with error correction model. This study establishes a conservative effect that indicates unidirectional causation between the use of renewable energy and economic growth and their relationship lasts in the long term.

Keywords

• Renewable energy
• Gross domestic product (GDP)
• Economic growth
• Causality
• Vietnam