Relationship between Renewable Energy Consumption, CO2 Emissions and Oil Prices in Industrial Sector of Selected OPEC and Non-OPEC Countries

Considering global warming and importance of sustainable growth in economic sub-sectors, this paper presents and estimates an empirical model of renewable energy consumption for the industrial sector of selected OPEC and non-OPEC countries over the period 1990-2014. Panel co-integration estimates by Pedroni (1999,2004) and Westerlund (2005,2006) show that, in the long term, increases in industrial value added per capita, real oil prices, and CO2 per capita are found to be major drivers behind per capita renewable energy consumption for both OPEC and Non-OPEC nations. Panel Granger causality by the Dumitrescu and Hurlin (2012) method confirms that there are bi-directional causality relationship between research variables and therefore verify feedback hypothesis. Finally, FMOLS and DOLS results show that when industrial value added per person increases, per capital renewable energy consumption increases by greater magnitude in non-OPEC than OPEC countries; also an increase in CO2 emissions per person increases per capita renewable energy consumption by greater amount in non-OPEC than OPEC nations.