The Relationship between the Share of Renewable Energy in Total Energy Consumption and Economic Growth: Kazakhstan and Turkiye Comparision

Abstract

This study examines the relationship between the share of renewable energy sources in total energy consumption and economic growth by comparing the data of Kazakhstan and Turkiye using the annual data for the 1991-2019 period. Impulse-Response Analysis and Variance Decomposition Analysis were applied to the data using the Vector Autoregressive (VAR) model. Research findings showed that although there is a relationship between renewable energy consumption and economic growth for Kazakhstan, this is not valid for Turkiye. The causality of this relationship, which is valid for Kazakhstan, is determined by the Granger causality analysis. According to the analysis, renewable energy consumption affects Kazakhstan’s economic growth, but this effect does not translate into a causal relationship. Again, for both countries, we see that the impact of renewable energy shocks on economic growth remained limited and faded in a few periods. Another important finding is that the share of renewable energy consumption in the economic growth variance decomposition is higher for Kazakhstan.