Green Energy Policies and the Energy Sector: An OLS and Fixed Effect Regression Approach to Economic Impact

With climate change on the rise, causing harm all across the globe, it has become imperative, now more than ever, to transfer to green energy from nonrenewables to decrease global emissions. This paper will analyze the impacts of green energy and specific green energy policies on economic growth, determining the best green energy initiative that will work for countries with varying economic structures to minimize short-term impacts. We will analyze these energy sectors with an Ordinary Least Squares (OLS) regression, with Gross Domestic Product (GDP) Growth as our dependent variable and the energy sector, fixed effects, and control groups as our x variables. Through this analysis, we found that nonrenewables significantly negatively impact economic growth, while renewable energy is more likely to impact GDP positively. We also found that subsidy programs are the best policies for countries to maintain economic growth. With these findings, we can further contribute towards creating a suitable course of action to safely create a green transition and reach net zero by 2050.