Renewable electricity production, economic growth and CO2 emissions: The Moroccan experience

Abstract

This study examines the causal links between electricity production from renewable sources, CO2 emissions and economic growth in Morocco. In this regard, the study used Auto Regressive Distributed Lag (ARDL) bound testing approach and Toda Yamamoto causality test over time series data from the period 1990 to 2015. The results of the co-integration test reveal the existence of a short-and long-term equilibrium between the variables. Furthermore, in the short term, CO2 emissions, electricity production from renewable sources and the active population have a negative impact on GDP. Gross fixed capital formation also has a negative impact on economic growth for up to one year but becomes positive after two years.. In the long term, GDP is mainly caused by CO2 emissions, the labor force, and the production of electricity from renewable sources. These results support the growth hypothesis. GFCF does not directly influence economic growth in Morocco, but indirectly through electricity production to explain the dynamics of GDP.