The Impact of Renewable Energy Consumption on Economic Growth: European Union Study

Renewable energy, often referred to as "clean energy", comes from natural sources or processes that are constantly replenished. Renewable energy sources differ in many ways from fossil fuels in that they are energy flows rather than reserves. Green energy exists in the form of sunlight, water currents, wind, geothermal heat, and tides, which are naturally replenished, even if their availability depends on time and weather. Also, renewable sources are biofuels: wood, vegetable oil and ethanol. The most important characteristics of renewable energy sources are reducing carbon dioxide emissions, protecting the environment, reducing dependence on foreign sources, and promoting employment of the population. Renewable energy trends are gaining momentum with the advent of sustainable development. The relevance of the topic is due to the growing concern of the inhabitants of our planet about the preservation of the environment and biodiversity. Object of research: renewable energy sources. Subject of research: the impact of consumption of renewable energy sources on economic growth. The purpose of the work is to assess the impact of consumption of renewable energy sources on economic growth for the EU countries. The importance of this issue is enormous, and the results of the study may have important implications for future renewable energy policies in conjunction with macroeconomic policies. The research question is why renewable energy is needed and how its consumption can affect the economic growth of the EU countries. The main objectives of my research: - to study the theoretical aspects of renewable energy sources and the benefits of their use; - to consider the existing literature on the impact of renewable sources on economic growth; - to analyze the role sustainable development goals in the spread of renewable energy sources; - to analyze the existing models of economic growth; - to collect data for an econometric study for a period of 25 years (from 1990 to 2015) for 28 EU countries and create a model for study the influence of variables; - choose a suitable method for the study and conduct an econometric analysis; - interpret the obtained results; - conduct conclusions on the performed analysis and make recommendations. The methodological tool consists of statistical and econometric methods of analysis, as well as substantiation of the sequence of econometric research. Statistical methods are used to analyze graphical and tabular materials, analyze the studied phenomena in dynamics. The use of econometric methods of analysis is necessary for the regression study of panel data and the construction of a model of the dependence of economic growth on renewable energy sources, testing the model for the presence of heteroscedasticity and multicollinearity problems, as well as finding relationships between variables. The source of theoretical data for the study of this topic will be articles by foreign authors - Arshed, Kousar, Gozgor and others, who previously studied on the topic of the impact of renewable energy sources on economic growth, as well as official documents, directives and four UN, and for empirical data I will use databases such as World Bank and Our World in Data. During an econometric study, it was revealed that the consumption of renewable energy sources has a positive effect on the economic growth of the EU countries. This gives a reason to further develop this direction. Based on the results obtained, I can conclude that the use of renewable energy sources in the EU-28 is a reliable way to reduce environmental pollution, in which economic growth will not decline.