Analysing the effects of the business cycle on renewable energy consumption and sustainable development: Evidence from EU countries

This article examines the relationship between business cycles and renewable energy consumption (REC/capita) in the European Union (EU) over the past two decades. Using a panel data regression model, the study identifies GDP growth, government effectiveness, regulatory quality, and political stability as significant indicators impacting REC across all EU member states. The model presents significant regression coefficients, emphasising that these variables have a consistent impact on REC. Our research findings confirm the conservation hypothesis developed in the specific literature, identifying the REC s sensitivity to different economic shocks. From this perspective, the EU policymakers should consider a balanced approach between economic and environmental SDGs since economic growth not only promotes short-run welfare, but also contributes to long-run environmental sustainability.