Towards a greener future: Renewable energy and economic sustainability in Europe

Abstract

The transition towards the use of renewable energy sources has been considered for a long time concerning their capabilities in promoting economic sustainability. Therefore, this study aims to examine the role of renewable energy in achieving economic sustainability in the European region. Empirical data was collected with the help of Eurostat to analyze the proposed relationship. Macro-level data from twenty-eight (28) European countries is collected, and the final dataset contains statistics between 2014 and 2023. Analyzing the findings of ordinary least squares and system GMM regression tests, as well as the different proxies of both renewable energy and economic sustainability, a positive relationship is found between renewable energy and economic sustainability. Moreover, increased availability of renewable energy (for instance, wind, solar, and the like) is regarded as a way of enhancing economic performance, creating more jobs, and saving the cost of energy. The outcomes also indicate that upgrading renewable energy infrastructure improves economic growth, promotes innovation, and stabilizes the economy's growth in the long run. This study adds to the current discourse on the efficiency of renewable energy and opens up a new area of research for scholars and policymakers.