Renewable Energy Consumption and the Transition to a Green Economy in Egypt

This paper aims at defining the green economy index and using econometric models in order to investigate the relationship between the consumption of renewable energy in Egypt’s transition to a green economy. Results indicate that first, consumption of renewable energy can effectively increase the level of development of green economy in the short and long term. Second, improving capital spending and increasing employment leads to an increase in the green economy index. Third, the effect of non-renewable energy on the green economy index is inverse, although there is a direct relationship between non-renewable energy consumption and total energy consumption. Therefore, it is necessary to consider the green credit policy of the government and financial institutions in order to maximize the enhanced effect of renewable energy investment on the green economy. The government must therefore develop a series of incentive measures to support and encourage investment in financing renewable energy, pay attention to the fundamental and guiding role of large enterprises in promoting renewable energy consumption and the development of the green economy, and fully mobilize the enthusiasm of all types of enterprises in promoting the development of the green economy.