Decarbonising Economic Growth through Innovations in Renewable Energy

Abstract

With the emerging consciousness of climate change and focus on climate-resilient growth across all developing nations, Brazil has proved to be a benchmark for the energy transition to an environmentally sustainable energy system. All the developing countries are heading towards decarbonised growth using alternative sources of energy. As a result, the paper explores the causal relationship between renewable energy consumption and economic growth in the case of Brazil, using the data for the last 12 years. The Granger causality test is performed to comprehend the relationship between the three crucial indicators of the newly emerging growth models. The paper examines the interdependence of renewable energy and economic growth using the Granger causality test to estimate two-way dependence in BRICS countries. The paper exhibits the evidence of one-sided long-run causality between the use of renewable energy and per capita GDP, concluding that the deployment of renewable energy Granger causes per capita GDP growth. The results of Granger causality and correlations further provide an adequate rationale for the state to invest in renewable energy technologies and innovations. In this backdrop, the paper attempts to analyse India’s green growth compared to Brazil in the last 15 years.

Keywords: Climate Change, Renewable Energy, Economic Growth, Human Capital, R&D, BRICS

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