The relationship amongst energy consumption (renewable and non-renewable), and GDP in Algeria

This study aims to explore economic growth-energy consumption nexus in Algeria between 1980 and 2012. With cointegration tests, we demonstrate the existence of long-run link between real gross domestic product, real capital and the two categories of energy consumption i.e renewable energy per capita and non-renewable energy. The long-run and the short-run autoregressive distributed lag (ARDL) estimates indicate that only the non-renewable energy sort and capital can contribute to enhancing economic growth whereas renewable energy does not show any significant effect. The outcome of causality tests proves a feedback link among non-renewable energy consumption and gross domestic product, among capital and gross domestic product, and among non-renewable energy and capital, in both short-run and long-run terms. Moreover, the results reveal a unidirectional link going from renewable energy to economic growth, capital, and non-renewable energy respectively, in the long run. Furthermore, the results illustrate the presence of a unidirectional link going from non-renewable energy to renewable energy in the short term. Our outcome suggests that policy makers in Algeria should enhance the renewable energy share together with controlling the non-renewable one.