Çankırı Karatekin University, Faculty of Economics and Administrative Sciences,Türkiye
Abstract
The main objective of this study is to examine the effects of economic growth, biocapacity, foreign direct investment, trade openness, and population on renewable energy consumption in the E7 countries (Brazil, China, Indonesia, India, Mexico, Russia, and Türkiye) during the period 1992-2024. Furthermore, another objective of the study is to test the nonlinear relationship between economic growth and renewable energy consumption within the framework of the Renewable Energy Kuznets Curve (REKC) hypothesis. This study contributes to the literature as it is one of the first empirical studies to examine the REKC hypothesis for the E7 countries and to include the biocapacity variable in the renewable energy model. Using PCSE and Driscoll-Kraay estimators, which produce robust estimates against heteroskedasticity, autocorrelation, and cross-sectional dependence problems, the findings show that economic growth and its square have negative and positive coefficients, respectively, in both estimators, and that there may be a U-shaped relationship between economic growth and renewable energy consumption in the E7 countries. However, the REKC hypothesis is empirically supported only in the PCSE estimator. The fact that the calculated turning point falls outside the sample range necessitates a cautious interpretation of the findings regarding the REKC hypothesis. Furthermore, it was found that biocapacity and population positively influence renewable energy consumption, while foreign direct investment and trade openness reduce renewable energy consumption. The negative impact of foreign direct investment and trade openness suggests that they may slow down the transition to clean energy in E7 countries. Therefore, policymakers should encourage environmentally friendly investments, implement policies to protect biocapacity, and develop strategies to ensure the gradual transition of domestic industries to clean energy.
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