Modelling renewable energy consumption and economic growth in Uganda

Abstract

Back ground: This study models renewable energy consumption and economic growth, with evidence from Uganda (1982-2018). The hypothesis that explains causality between renewable energy consumption and economic growth follows the growth, conservation, feedback and neutral. Methods: The study uses vector error correction model (VECM) and structural vector auto regression (VAR), within a multivariate data framework. The Pairwise Granger test was specifically used to establish the direction of causality between variables of study. The Johansen co-integration test was carried out to ascertain if there exists a long run relationship between renewable, domestic investment, foreign direct investment and real GDP. Results: The results support the neutral hypothesis between renewable energy consumption and economic growth. Conclusion: The conclusion therefore is a unidirectional relationship running from of renewable energy consumption to economic growth Implications/Relevance/Originality /Value: This paper provides insights into how renewable energy consumption drives economic growth and sustainable development.