Re-evaluating the asymmetric economic policy uncertainty, conventional energy, and renewable energy consumption nexus for BRICS

Economic policy uncertainty has increased throughout the world since the previous few decades. Moreover, economic policy uncertainty significantly influences economic activities that may also produce a strong effect on energy consumption. The objective of the study is to investigate the effect of economic policy uncertainty on renewable and non-renewable energy consumption in the case of BRICS countries, for the period 1991-2019. The outcome of the panel NARDL-PMG modeling technique demonstrates that a positive shock in economic policy uncertainty exerts a negative impact on renewable energy consumption and positive impact on non-renewable energy consumption in the short-run and long-run. However, a negative shock in economic policy uncertainty has a positive impact on renewable energy consumption and negative impact on non-renewable energy consumption in the long run, while this effect becomes statistically insignificant in the short run. Numerical elements of long-run results infer that economic policy uncertainty is more influence on renewable energy compared to non-renewable energy consumption in BRICS in long run. On the basis of findings, the study suggests that the authorities should launch such programs that result in shrinking uncertainties linked with economic policy.

Automated summary

The study demonstrates that economic policy uncertainty has a significant impact on renewable and non-renewable energy consumption in BRICS countries, with positive shock negatively affecting renewable energy consumption and positively affecting non-renewable energy consumption in the short and long run. Conversely, a negative shock in economic policy uncertainty positively impacts renewable energy consumption and negatively impacts non-renewable energy consumption in the long run, with the effect becoming statistically insignificant in the short run. These findings suggest the importance of reducing uncertainties linked with economic policy through effective programs.