Sustainable development, renewable energy transformation and employment impact in the EU

Abstract

The renewable energy transformation will impact the entire economy. We investigate the impact and interlinkages in employment and non-renewable energy with the renewable energy transition in Europe. We further assess the potential contributions of renewable energy and non-renewable energy to the variability (changes) of future employment, output, and carbon emissions within the European Union (EU). Analyzing recent data from 28 EU countries and Norway, we employ a panel vector autoregressive regression model to estimate the potential interlinkages. Our results suggest that the transition to renewable energy sources has a positive but small and significant net impact on average employment in EU. We further find that renewable energy consumption contributes substantially to the future changes in employment in the short and the medium term. The potential effect of employment on non-renewable fossil-fuel-based energy consumption is relatively lower. Moreover, future renewable energy consumption contributes significantly to variations in non-renewable energy, per capita carbon emissions and GDP per capita in the short and the medium-term. The contribution of non-renewable energy to the future variability in renewable energy consumption is low, reflecting the diminishing impact of fossil-fuel-based energy on renewable energy consumption.