Energy Consumption, Renewable Energy and Economic Growth: The Case of BRICS Countries

Abstract

: This study examines the relationship between energy consumption, renewable energy supply, and economic growth in BRICS countries over the period 2000–2023 within the framework of panel data analysis. In the analysis, economic growth is represented by gross domestic product, while total energy consumption and renewable energy supply are used as the main energy-related variables. The study contributes to the literature by evaluating the energy-growth nexus together with both total energy use and renewable energy dynamics in BRICS economies. Since BRICS countries may be affected by common global shocks, cross-sectional dependence is considered in the empirical framework. The stationarity properties of the variables are examined, and it was determined that all series become stationary after taking first differences. The residual-based panel cointegration test does not indicate a long-run equilibrium relationship among the variables. Therefore, the analysis focuses on short-run dynamics using first-difference panel models rather than long-run equilibrium effects. The findings show that renewable energy supply positively affects total energy consumption in the short run, while economic growth is associated with higher energy demand. The Dumitrescu-Hurlin panel causality results indicate a unidirectional causal relationship from renewable energy supply to energy consumption and from energy consumption to economic growth. Consequently, energy consumption continues to play a significant role in short-term economic growth in BRICS countries, while renewable energy investments indirectly support growth by expanding total energy supply. These findings suggest that sustainable growth policies should combine renewable energy expansion with energy efficiency