Convergence of clean energy consumption—panel unit root test with sharp and smooth breaks

Cai, Yifei; Menegaki, Angeliki N.

Convergence of clean energy consumption—panel unit root test with sharp and smooth breaks

2019

Cai, Yifei | Menegaki, Angeliki N.

This paper first visits the clean energy consumption for 21 OECD countries and 14 Emerging market countries through a panel unit root test with both sharp and smooth breaks covering the period from 1965 to 2016. The time-varying fitted intercepts of the estimation could better fit the path of clean energy consumption for selected countries. The empirical results suggest that not only sharp breaks should be considered, but also smooth breaks. The economic implications are insightful for the convergence of clean energy consumption for 22 of 35 countries. For USA, Canada, Austria, Germany, Greece, Ireland, UK, Australia, New Zealand, South Korea, Hungary, China, Philippines, and Thailand, the clean energy consumption is divergence. Policy encouragement policy would permanently affect not only clean energy consumption path, but also aggregate economic sectors related to consume clean energy.

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