Renewable energy consumption and economic efficiency: Evidence from European countries

This paper examines the relationship between renewable energy consumption and economic efficiency. For this reason, conditional Data Envelopment Analysis estimators alongside with nonparametric regressions are applied in a sample of 25 European countries for the year 2010 with emphasis given to Eastern and Western European countries. Our results reveal that renewable energy consumption has a positive effect on countries' economic efficiency for lower consumption levels while for higher levels, the analysis reveals mixed effects, which are also subject to regional disparities. Finally, it appears that the effect of renewable energy consumption on countries’ economic efficiency depends also on countries’ specific regional characteristics as well as on the environmental policies adopted.