Analyzing the Determinants of Renewable Energy: The Moderating Role of Technology and Macroeconomic Uncertainty

Abstract

In line with the importance of SDG-7, a number of studies have endeavored to divulge the changes in renewable energy consumption (REC); however, the literature fails to either understand the importance of technology i.e., information communication technologies (ICT) and macroeconomic uncertainty in this context or employ robust econometric techniques. This research paper extends the prior literature by focusing on technology and macroeconomic uncertainty as novel determinants in addition to natural resources, human development, globalization, and economic growth as control variables of renewable energy for the top 10 renewable energy-consuming countries by applying several second and third generation econometric tests on annual data from 1990 to 2017. The empirical estimations determine ICT as a crucial factor of renewable energy, suggesting that it significantly triggers REC in the top economies. Conversely, the detrimental effects of uncertainty tend to shrink REC. Furthermore, natural resources, human development, globalization, and economic growth significantly boost REC as consistent with the existing literature. Based on these findings, this study suggests several SGD-oriented policies.