Understanding the Influence of Wind and Solar PV on Socioeconomic and Environmental Trends

Abstract

This paper investigates the non-causality perspective of economic growth, investment, social well-being, employment, GHG emissions on renewable energy sources (RES) (wind and solar PV), providing a comprehensive overview of renewable technologies that effect on socio-economic and environmental drivers. The analysis and enhancing linear regression techniques, addressing cross-country RES installed capacity heterogeneity, and applying time-lags techniques to better understand the temporal effect of RES´s investment. The study tested: (I) economic growth in a country is related to the development of RESs, employment, investment. (II) Increased RESs share positively impacts social well-being. (III) RESs implementation reduces GHG emissions. Our findings suggest that RES positively influenced economic growth over time for countries with higher installed capacity. However, this statistically significant is not observed across countries with lower installed capacity nor across all indicators, like social well-being, employment, investment, which show modest growth trend over time. GHG emissions also showed an inverse trend, suggesting the needs the renewable electricity´s expansion accompanied by additional mitigation measures to reduce emissions. One limitation is the temporal restriction, which limits the assessment of long-run trends. Future research should focus on gathering a larger dataset for long-run trends analysis.