The Impact of Renewable Energy Consumption on Economic Growth in Jordan

Abstract

This study aims to examine the impact of renewable energy consumption, capital, and labor on economic growth in Jordan during the period 1996-2018. The study used the Johansen co-integration test, Cobb-Douglas production function, and the dynamic ordinary least squares (DOLS), to test the hypotheses of the study. The results of the co-integration test showed that there is a long-run equilibrium relationship between the study variables. The results of (DOLS), indicated that renewable energy consumption has a long-run relationship with the economic growth in Jordan and that the consumption of renewable energy has a positive and statistically significant impact on the economic growth in Jordan. Capital and labor have a positive and statistically significant impact on economic growth in Jordan. The study recommends adopting policies that would increase investment in renewable energy by providing exemptions, easy loans at low-interest rates.  Furthermore, it also encourages adopting renewable energy policies as an effective option to reduce pollution and provide job opportunities to ensure good economic growth rates in Jordan.