Rich enough to go renewable, but too early to leave fossil energy?

Typically environmental Kuznets curve (EKC) studies on energy concentrate on the emissions produced from energy production or consumption and neglect the aspect of exhaustion of a natural resource, which is an irreversible result, against any definition of sustainability and intergenerational equity. This paper investigates whether there is an environmental Kuznets curve for renewable energy, whether there should be one and if there is, what it should stand for. For this reason the paper employs balanced panel data for 33 European member and candidate state countries that produce crude oil, natural gas, coal and renewable energy for the years 1990–2010 to investigate the relationship between their scale of economic activity, fossil energy production and the production of renewable energy. Results from random effects models together with Arellano Bond estimator models identify the U-shape for the environmental Kuznets curve only for renewable energy and coal production. A theoretical justification on the mechanisms possibly driving the environmental Kuznets curve for renewable energy are also discussed.