Are shocks to renewable energy consumption permanent or transitory? An empirical investigation for Brazil, China, and India

Abstract

This paper investigates whether there is a unit root in renewable energy consumption in three large developing economies: Brazil, China, and India over the period 1971-2014. To do so, it uses four unit root tests assuming one structural break, two structural breaks, and more than two structural breaks. It observes that renewable energy consumption is a unit root process in Brazil, but it is found as stationary in China and India. The paper also tackles issues and challenges in the unit root test methodology in energy economics literature and provides implications for renewable energy consumption in three economies. (C) 2016 Elsevier Ltd. All rights reserved.