Could alternative energy sources in the transport sector decarbonise the economy without compromising economic growth?
The transition towards a low-carbon transport sector (TS) plays a fundamental role on the decarbonisation of economies. The effects of both conventional (fossil fuels) and alternative (renewable fuels and electricity) energy consumption in the transport sector, economic growth, and carbon dioxide emissions were analysed by using a panel vector autoregressive of 21 high-income Organization for Economic Co-operation and Development countries from 1990 to 2014. The results support the feedback hypothesis between both conventional and alternative TS energy sources and economic growth. In other words, electricity use on TS has enlarged the economic growth, while consumption of renewable fuels is actually hampering it. Additionally, TS fossil fuels consumption is contributing to economic growth. With reference to the environmental impacts of TS energy use, this paper highlights the harmful effect of conventional energy sources on the environment. However, there is no evidence wherein TS alternative energy sources are directly linked with a reduction of carbon dioxide emissions. Accordingly, the promotion of alternative TS energy sources should deserve further attention. On the one hand, there is evidence that the use of renewable fuels is obstructing economic growth. On the other hand, the use of both TS electricity and renewable fuels is not reducing carbon dioxide emissions.
KeywordsEnergy consumption Transport sector Conventional sources Electricity Renewable fuels CO2 emissions
The financial support of the NECE-UBI, the Research Unit in Business Science and Economics, sponsored by the Portuguese Foundation for the Development of Science and Technology, Ministry of Science, Technology and Higher Education, Project UID/GES/04630/2013, is gratefully acknowledged. We also would like to express our acknowledgments to the anonymous reviewers for the valuable and useful comments and suggestions.
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