Renewable electricity consumption and economic development: New findings from the Baltic countries

This study employed homogeneous and heterogeneous panel methods to examine the relationship between renewable and non-renewable electricity consumption and economic development in three transition economies in the Baltic region, namely, Estonia, Latvia and Lithuania, for the period of 1992-2011. The study put forward four hypotheses to examine the renewable electricity-development nexus. The findings indicated that there existed a unidirectional causality from the economic development to renewable electricity consumption. Thus, the results obtained from the statistical analyses have provided empirical evidence in support of the conservation hypothesis that postulates that economic development causes the expansion of renewable electricity consumption, but not vice versa.