Complementarity and Substitution Effects of Investments in Renewable Energy and Global Economic Growth: Strategic Planning Opportunities for Development of Rural Areas

Abstract

Economic growth and societal well-being are highly dependent on the availability and efficient use of energy resources. This process evolves over time, along with changing developmental challenges, leading to an alteration of the world energy mix. The role of renewable energy sources in addressing these challenges has been widely recognized, but mostly from the ecological and climate change perspectives. Not enough focus has been paid to economic growth effects, such as potential job creation and income increases related to this process, often taking place in rural areas due to the availability of space and raw materials. In this context, the first objective of this study is to analyze the complementarity and substitution effects of investments in renewables and their connectedness with global economic growth. The second is to discuss the importance of effective strategic planning in supporting the growth of rural areas by promoting the production of renewable energy, based on selected international examples, including the EU Vision for Agriculture and Food recently presented by the European Commission. Using various data sources and employing basic statistical tools, we found that investing in renewable energy contributes to global economic growth. We also show how different countries view the indispensable role of rural areas in this process differently in their strategic policy documents.