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Abstract(s)
The transport sector was analysed by studying the interaction between conventional (fossil fuels) and alternative (electricity and renewable fuels) energy consumption, on economic growth and CO2 emissions. To do this, annual data for 15 OECD countries from 1995 to 2014 was used. The short- and long-run effects were analysed individually with the robust Driscoll-Kraay estimator in an Autoregressive Distributed Lag (ARDL) structure. The results support the argument that fossil fuels consumption in the transport sector have contributed to increasing both economic growth and CO2 emissions. In contrast, both electricity and renewable fuels in the transport sector have hampered economic growth. This paper supports the idea that the shift to a low-carbon transport sector must be reanalysed. Although the use of renewable fuels is reducing CO2 emissions, a negative impact on economic growth could reveal that the costs remain high. Furthermore, the transition to electric mobility must be pursued, but policies need to be reconsidered, to avoid obstructing economic growth.