The Effect of Renewable Energy Use on the Transition to a Green Economy:An Applied Study on Jordan and Saudi Arabia

Abstract

The transition from a traditional economy to a green economy depends on several economic sectors, the most important of which is the renewable energy sector. Accordingly, this study aims to examine the impact of renewable energy use on the transition to a green economy in Jordan and Saudi Arabia during the period 2000–2021, using panel data based on a pooled model. The findings reveal a positive and statistically significant effect of renewable energy use on the green economy index in the countries under study. A 1% increase in renewable energy use leads to a 0.204% rise in the green economy index in addition to the presence of a negative and statistically significant

impact of non-renewable energy consumption on the green economy index in the study sample countries, as the increase in non-renewable energy consumption by (1%) leads to a decrease in the green economy index by (0.639%). The results of this study found that there is a positive and statistically significant effect of renewable energy use on the green economy index in the countries under study, as the increase in renewable energy use by (1%) leads to an increase in the green economy index by (0.204%) with the stability of other factors,

The study recommends enhancing investment in the green economy by expanding the use of renewable energy, as higher investment in renewable energy contributes to stronger green economic performance. It further recommends adopting policies and strategies that take environmental requirements into account to promote innovation and green growth, as well as increasing economic incentives for activities related to the renewable energy sector.