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Environmental Impacts of Renewable Energy Use and Economic Growth within the Framework of Sustainable Development Goal
American Journal of Economics and Business Management,
Vol. 8 No. 6 (2025): June
Abstract
The traditional model of economic growth heavily reliant on fossil fuels, has contributed to environmental degradation, climate change, and resource depletion. This path poses significant risks to ecological balance, public health, and long-term economic stability. This requires a paradigm shift toward cleaner, more sustainable energy systems. Sustainable development seeks to align economic progress with social justice and environmental responsibility to ensure that the needs of the present are met without compromising the ability of future generations to meet their needs. The essence of this vision is to shift to renewable energy sources as a pivotal strategy for achieving comprehensive and sustainable economic development which provides a path to separate economic growth from environmental damage. Accordingly, the aim of this study is to analyze the implications of economic performance and the resulting justifications that contribute to supporting and enhancing the use of renewable energy, the transition to a low-carbon economy and a clean environment within the framework of the Sustainable Development Goals, and providing insights to policy makers on the transition to sustainable renewable energy. The study's results were consistent with the economic theory of development, which states that renewable energy has an impact on reducing carbon dioxide emissions and enhancing sustainable development, while the variables of urban expansion, foreign direct investment, and economic growth have shown negative impacts on the environment despite their positive effects towards sustainable development. The main challenge therefore lies in identifying strategies that enhance economic growth within the framework of mitigating environmental damage and ensuring energy security especially since renewable energy sources represent a promising solution to this challenge by providing clean and sustainable energy alternatives compared to fossil fuels.
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- 1. Abboud, Marwan Abdullah. (2024). sustainable development (A study of the Constitution of the Republic of Iraq for the year 2005), NTU Journal for Administrative and Human Sciences (2024) : 49 -63. DOI: https://doi.org/10.56286/ntujahs.
- 2. Abd El Razik, A.M., & El sayed, S. (2022). The importance of solar energy projects in achieving sustainable development. International Journal of Advanced Research on Planning and Sustainable Development, 5(2), 11–42. https://doi.org/10.21608/ijarpsd.2022.274477
- 3. Adanma, U. M., & Ogunbiyi, E. O. (2024). Assessing the economic and environmental impacts of renewable energy adoption across different global regions. Engineering Science & Technology Journal, 5(5), 1767-1793. https://doi.org/10.51594/estj/v5i5.1154
- 4. Agbakwuru, V., Obidi, P. O., & Chinelo, O. (2024). The role of renewable energy in achieving sustainable development goals. International Journal of Environmental Research and Urban Development, 7(2), 46. https://doi.org/10.53430/ijeru.2024.7.2.0046
- 5. Alhazmi, A. M. (2022). Sustainable architecture and its importance to the environment and human. Journal of Science and Technology, 18(2), 1–20. https://doi.org/10.20428/jst.v18i2.103IIETA
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- 7. Aouini, S., Beggat, H., & Mahlous, Z. (2023). The impact of renewable energy and economic growth on environmental pollution: Using second-generation panel techniques. Economics and Business, 37, 189–205. https://doi.org/10.2478/eb-2023-0012
- 8. Chou, C.-H., Ngo, S. L., & Tran, P. P. (2023). Renewable energy integration for sustainable economic growth: Insights and challenges via bibliometric analysis. Sustainability, 15(20), 15030. https://doi.org/10.3390/su152015030
- 9. Farhana, K., Kadirgama, K., Mahamude, A. S. F., & Mica, M. T. (2022). Energy consumption, environmental impact, and implementation of renewable energy resources in global textile industries: An overview towards circularity and sustainability. Materials Circular Economy, 4(1), 15. https://doi.org/10.1007/s42824-022-00059-1
- 10. Fumey, M. P., Sackitey, G. M., Wiredu, J., Akrong-Nartey, C., Arthur, D. E., & Mose, N. (2024). Neutralizing the surging environmental pollution amidst renewable energy consumption and economic growth in Ghana: Insights from ARDL and quantile regression analysis. Sustainable Social Development, 2(6), 2891. https://doi.org/10.54517/ssd2891
- 11. Gavkalova, N., Lola, Y., Prokopovych, S., Akimov, O., Smalskys, V., & Akimova, L. (2022). Innovative development of renewable energy during the crisis period and its impact on the environment. Virtual Economics, 5(1), 65-77. https://doi.org/10.34021/ve.2022.05.01(4)
- 12. Güney, T. (2019). Renewable energy, non-renewable energy and sustainable development. International Journal of Sustainable Development & World Ecology, 26(5), 389-397. https://doi.org/10.1080/13504509.2019.1595214
- 13. Kao, Chihwa. & Chiang, Min-Hsien. (2000). On the Estimation and Inference of a Cointegrated Regression in Panel Data, Advances in Econometrics, Vol. 15, Emerald Group Publishing Limited, Leeds, pp. 179-222. https://doi.org/10.1016/S0731-9053(00)15007-8
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- 15. Nazir, M. S., Mahdi, A. J., Bilal, M., Sohail, H. M., Ali, N., & Iqbal, H. M. N. (2019). Environmental impact and pollution-related challenges of renewable wind energy paradigm – A review. Science of the Total Environment, 683, 436-444. https://doi.org/10.1016/j.scitotenv.2019.05.274
- 16. Ocak, M., Ocak, Z., Bilgen, S., Keles, S., & Kaygusuz, K. (2004). Energy utilization, environmental pollution and renewable energy sources in Turkey. Energy Conversion and Management, 45(6), 845-864. https://doi.org/10.1016/S0196-8904(03)00192-4
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- 19. Sharaf El-Din, N., el-Said, M., Moustafa, W., & Abdou, H. (2020). Compatibility of renewable energies with the standards of energy management system and environmental design of green buildings. Journal of Al-Azhar University Engineering Sector, 15(55), 527–537. https://doi.org/10.21608/auej.2020.87841
- 20. Soukiazis, E., Proença, S., & Cerqueira, P. A. (2017). The interconnections between renewable energy, economic development, and environmental pollution: A simultaneous equation system approach. CeBER Working Papers, No. 10. University of Coimbra.
- 21. Stock, James H. & Watson, Mark W. (1993). Cointegrating Vectors in Higher Order Integrated System, Econometrica, Vol. 61, No. 4, pp. 783-820. https://www.princeton.edu/~mwatson/papers/Stock_Watson_Ecta_1993.pdf
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References
1. Abboud, Marwan Abdullah. (2024). sustainable development (A study of the Constitution of the Republic of Iraq for the year 2005), NTU Journal for Administrative and Human Sciences (2024) : 49 -63. DOI: https://doi.org/10.56286/ntujahs.
2. Abd El Razik, A.M., & El sayed, S. (2022). The importance of solar energy projects in achieving sustainable development. International Journal of Advanced Research on Planning and Sustainable Development, 5(2), 11–42. https://doi.org/10.21608/ijarpsd.2022.274477
3. Adanma, U. M., & Ogunbiyi, E. O. (2024). Assessing the economic and environmental impacts of renewable energy adoption across different global regions. Engineering Science & Technology Journal, 5(5), 1767-1793. https://doi.org/10.51594/estj/v5i5.1154
4. Agbakwuru, V., Obidi, P. O., & Chinelo, O. (2024). The role of renewable energy in achieving sustainable development goals. International Journal of Environmental Research and Urban Development, 7(2), 46. https://doi.org/10.53430/ijeru.2024.7.2.0046
5. Alhazmi, A. M. (2022). Sustainable architecture and its importance to the environment and human. Journal of Science and Technology, 18(2), 1–20. https://doi.org/10.20428/jst.v18i2.103IIETA
6. Anser, M. K., Usman, M., Sharif, M., Bashir, S., Shabbir, M. S., Khan, G. Y., & Lopez, L. B. (2021). The dynamic impact of renewable energy sources on environmental economic growth: Evidence from selected Asian economies. Environmental Science and Pollution Research, 29(4), 3323–3335. https://doi.org/10.1007/s11356-021-17136-8
7. Aouini, S., Beggat, H., & Mahlous, Z. (2023). The impact of renewable energy and economic growth on environmental pollution: Using second-generation panel techniques. Economics and Business, 37, 189–205. https://doi.org/10.2478/eb-2023-0012
8. Chou, C.-H., Ngo, S. L., & Tran, P. P. (2023). Renewable energy integration for sustainable economic growth: Insights and challenges via bibliometric analysis. Sustainability, 15(20), 15030. https://doi.org/10.3390/su152015030
9. Farhana, K., Kadirgama, K., Mahamude, A. S. F., & Mica, M. T. (2022). Energy consumption, environmental impact, and implementation of renewable energy resources in global textile industries: An overview towards circularity and sustainability. Materials Circular Economy, 4(1), 15. https://doi.org/10.1007/s42824-022-00059-1
10. Fumey, M. P., Sackitey, G. M., Wiredu, J., Akrong-Nartey, C., Arthur, D. E., & Mose, N. (2024). Neutralizing the surging environmental pollution amidst renewable energy consumption and economic growth in Ghana: Insights from ARDL and quantile regression analysis. Sustainable Social Development, 2(6), 2891. https://doi.org/10.54517/ssd2891
11. Gavkalova, N., Lola, Y., Prokopovych, S., Akimov, O., Smalskys, V., & Akimova, L. (2022). Innovative development of renewable energy during the crisis period and its impact on the environment. Virtual Economics, 5(1), 65-77. https://doi.org/10.34021/ve.2022.05.01(4)
12. Güney, T. (2019). Renewable energy, non-renewable energy and sustainable development. International Journal of Sustainable Development & World Ecology, 26(5), 389-397. https://doi.org/10.1080/13504509.2019.1595214
13. Kao, Chihwa. & Chiang, Min-Hsien. (2000). On the Estimation and Inference of a Cointegrated Regression in Panel Data, Advances in Econometrics, Vol. 15, Emerald Group Publishing Limited, Leeds, pp. 179-222. https://doi.org/10.1016/S0731-9053(00)15007-8
14. Mark, Nelson C. & Sul, Donggyu. (2003). “Co-integration Vector Estimation by Panel DOLS and Long-run Money Demand”, Oxford Bulletin of Economics and Statistics, 65(5), pp. 655-680. https://www3.nd.edu/~nmark/wrkpaper/PDOLS_Oxford_Bulletin.pdf
15. Nazir, M. S., Mahdi, A. J., Bilal, M., Sohail, H. M., Ali, N., & Iqbal, H. M. N. (2019). Environmental impact and pollution-related challenges of renewable wind energy paradigm – A review. Science of the Total Environment, 683, 436-444. https://doi.org/10.1016/j.scitotenv.2019.05.274
16. Ocak, M., Ocak, Z., Bilgen, S., Keles, S., & Kaygusuz, K. (2004). Energy utilization, environmental pollution and renewable energy sources in Turkey. Energy Conversion and Management, 45(6), 845-864. https://doi.org/10.1016/S0196-8904(03)00192-4
17. Sachs, J. D., Lafortune, G., & Fuller, G. (2024). The SDGs and the UN Summit of the Future. Sustainable Development Report 2024. Sustainable Development Solutions Network (SDSN) & Dublin University Press. https://doi.org/10.25546/108572:contentReference[oaicite:2]{index=2}
18. Saikkonen, Pentti. (1991). Asymptotically Efficient Estimation of Cointegration Regressions, Econometric Theory , Volume 7 , Issue 1 , Published online by Cambridge University Press, pp. 1-21. https://doi.org/10.1017/S0266466600004217
19. Sharaf El-Din, N., el-Said, M., Moustafa, W., & Abdou, H. (2020). Compatibility of renewable energies with the standards of energy management system and environmental design of green buildings. Journal of Al-Azhar University Engineering Sector, 15(55), 527–537. https://doi.org/10.21608/auej.2020.87841
20. Soukiazis, E., Proença, S., & Cerqueira, P. A. (2017). The interconnections between renewable energy, economic development, and environmental pollution: A simultaneous equation system approach. CeBER Working Papers, No. 10. University of Coimbra.
21. Stock, James H. & Watson, Mark W. (1993). Cointegrating Vectors in Higher Order Integrated System, Econometrica, Vol. 61, No. 4, pp. 783-820. https://www.princeton.edu/~mwatson/papers/Stock_Watson_Ecta_1993.pdf
22. United Nations. (2025). Sustainable Development Goal indicators, Department of Economic and Social Affairs, Statistic Division. https://unstats.un.org/sdgs/
23. World Bank. (2025). Data and Statistics, World Development Indicators, Washington, D.C., USA. https://databank.worldbank.org/source/world-development-indicators.