Energy consumption and economic growth in the USA: Evidence from renewable energy

Recent debates about renewable energy consumption manifest two main expectations. Firstly, renewable energy consumption should contribute to economic growth and secondly, it should not cause damage on environment. This study focuses on the first issue by applying Toda-Yamamoto procedure and bootstrap-corrected causality test for the US since empirical literature criticizes the Toda-Yamamoto test which bases on asymptotic distribution. The models consist of real GDP, employment, investment and kinds of renewable energy consumption. Only one causal relationship was found from biomass-waste-derived energy consumption to real GDP. No causal relationship was found between real GDP and all of the other renewable energy kinds-total renewable energy consumption, geothermal energy consumption, hydro-electric energy consumption, biomass energy consumption and biomass-wood-derived energy consumption. That is using of energy from waste cause not only solving the dumping problems but also it contributes to real GDP. For policy purpose, the results of this study suggest that countries should concentrate on energy producing from waste as an alternative energy resource. (C) 2012 Elsevier Ltd. All rights reserved