ABSTRACT
The goal of this study is to explore the impacts of renewable energy on sustainability across the 117 countries with publicly available data on their deployment of renewables from the year 2000 to 2014. As an indicator representing sustainability, we adopt the Inclusive Wealth Indicator (IWI), which is meant to reveal the region’s potential for current and future wealth and is calculated by multiplying different types of capital by their respective shadow prices. IWI is composed of three types of capital: produced capital (PC), natural capital (NC), and human capital (HC). In this study, we estimate the four equations which have seven types of energy (solar, wind, traditional bioenergy, modern bioenergy, large-hydro, small-hydro, and non-renewable energy) as explanatory variables, and IWI and its three components (PC, NC, and HC) as explained variables. Our results show that solar, large-hydro, and non-renewable energy have the positive impacts on IWI, whereas wind, traditional bioenergy, modern bioenergy, and small-hydro have negative impacts. Moreover, we find that solar, wind, modern bioenergy, and small-hydro, which have generally been acknowledged as “cleaner energy”, have negative impacts on NC, while non-renewable energy and large-hydro have positive impacts.
