Economic Aspect of the Transition to Sustainable Energy
Development
Laila Gazieva
a
, Diana-Madina Gudaeva and Zelimkhan Anzorov
Kadyrov Chechen State University, 32 Sharipov Street, Grozny, Russia
Keywords: European economy, economy transformation, sustainable energy development, carbon balance.
Abstract: Energy production is one of the most important sectors of the economy that needs to be transformed into new
forms of sustainable energy development. Modern research should be focused on finding the economics of
transforming current energy production into the development of new renewable energy sources, which will
provide a comprehensive environmental impact and ecological balance. The development of new renewable
energy sources and the restoration of the ecological balance are the primary tasks of Russia and other
European countries. The study will show how the transition to sustainable energy development affects
economic growth and development in Europe. However, this study will look at the benefits of moving towards
sustainable energy development in the economy. The main question for the study is what economic benefits
can be gained by the EU from the transition to sustainable energy development through the provision of
renewable energy production.
1 INTRODUCTION
The global economy relies on the use of fossil fuels
to produce energy. As the global population continues
to increase, so does the standard of living along with
the demand for energy consumption. As a result,
energy consumption demand is expected to grow by
21% by 2030 to meet growing consumer demand,
according to IEA forecasts (IEA, 2020). At the same
time, climate change has caused the world to pay
great attention to greenhouse gas emissions. This
growing concern has many impacts on the
environment, prompting the government to make
decisions to reduce serious environmental impacts
such as gas emissions. The government’s decision on
the energy sector is strongly connected to its
sustainability for having long-term economic
benefits. At the same time, decisions on sustainable
investments in the energy sector focus on climate
change in order to reduce growing concerns about
climate.
The fact is that the transition to sustainable energy
development has become a focus in many countries
to reduce environmental pressures and increase
economic efficiency. Transformative energy
development is an emerging issue that can ensure
a
https://orcid.org/0000-0002-0080-1401
sustainable development and growth without
damaging the environment. Ensuring sustainable
development is bound to boost economic
development, also known as an eco-friendly or green
economy. The transition to sustainable energy
development will have knock-on effects on the
economy. Making energy supplies more sustainable,
cost-effective, safe, reliable and environmentally
sustainable can ensure long-term economic growth.
The recent shift towards sustainable energy
development has increased significantly due to the
reduction of adverse climate impacts and sustainable
energy supply facilities. This shift towards energy
development has been strengthening its
socioeconomic benefits over a long period of time.
The transition to sustainable energy development
depends on reducing fossil energy consumption by
increasing the development of renewable energy
sources such as solar, wind, and biomass. This
renewable energy has no impact on the environment
and makes a significant contribution to the economy.
While traditional energy production accelerates the
use of natural resources, it also affects our
environment and takes a huge toll on human-caused
natural disasters. Conversely, ensuring sustainable
energy development accelerates sustainable
278
Gazieva, L., Gudaeva, D. and Anzorov, Z.
Economic Aspect of the Transition to Sustainable Energy Development.
DOI: 10.5220/0011570300003524
In Proceedings of the 1st International Conference on Methods, Models, Technologies for Sustainable Development (MMTGE 2022) - Agroclimatic Projects and Carbon Neutrality, pages
278-281
ISBN: 978-989-758-608-8
Copyright
c
2023 by SCITEPRESS – Science and Technology Publications, Lda. Under CC license (CC BY-NC-ND 4.0)
production, ensures stable growth, creates long-term
economic benefits, creates new jobs, and improves
living standards (Mentsiev et al., 2020).
There is no doubt that the transition to sustainable
energy development is the most important issue in
ensuring sustainable economic growth in both
advanced and emerging countries. The energy sector
is one of the most important sectors of the economy
and needs to be transformed into new forms of
sustainable energy production. In this regard, the
research will focus on finding the economic features
of transforming current energy production into new
renewable energy development, which will ensure a
comprehensive environmental impact and ecological
balance. The research will recognize how the
transition to sustainable energy development affects
economic growth and development in Europe.
However, this study will investigate the benefits of
shifting sustainable energy development in the
economy. Therefore, the main question for the study
is therefore to what extent the EU can benefit
economically from the transition to sustainable
energy development by ensuring the production of
renewable energy.
2 MATERIALS AND METHODS
The methodology of the research is the process of
designing the research which includes the collection
of data, measuring the data, and analysis of the data
on the basis of the research questions. The study will
investigate the economic advantages of transitioning
to sustainable energy development in the EU
economy by securing renewable energy production.
Data will be collected from various published sources
such as articles, research papers, sustainable energy
development reports, government reports, and so on.
The data will then be systematically analyzed to
determine the economic impact of formulating such
energy development policies. The research will
follow the descriptive qualitative approach to find the
research answer.
Therefore, the research project will follow an
experimental study on the European Union. The study
will determine the economic impact of shifting
energy development towards renewable energy
production. The study will use non-probability
sampling techniques to collect data from numerous
sources, including local development reports,
academic research, professional journal articles,
government reports, and existing published academic
research papers.
In this research, the study will follow the
“Preferred Reporting Items for Systematic reviews
and Meta-Analyses” PRISMA analysis to identify the
sources and evidence. Then, in order to collect the
data, the SLR (Systematic Literature Review)
approach to the literature review was to look for the
economic advantages of the transition to sustainable
energy development in the EU economy. The data
will then be critically analyzed in economic terms to
discover the economic benefits of this transition.
Economic growth depends on the mobilization of
resources through the industrial revolution, maximum
capital mobilization, technological advancement, and
strategic change which will ensure economic
development. Energy consumption is one of the main
economic factors of an economy, and economic
growth depends to a large extent on how much energy
a country can produce to ensure proper development.
The energy consumption will change the pattern of
the level of development. The U.S. Energy
Information Administration projects that energy
consumption will increase by more than 50 percent
by 2050. Most developing countries are expected to
develop their energy consumption that does not
belong to the OECD. Economic growth has a huge
impact on rising costs due to environmental impacts.
The use of the conventional energy production
process affects the environment which will increase
the carbon footprint. Most countries use only fossil
fuels to produce energy and meet huge demands that
are not sustainable for the environment. This
unsustainable production process will reduce a
significant portion of GDP due to environmental
impacts (EIA, 2021).
Many countries have adopted sustainable energy
development strategies to achieve the Sustainable
Development Goals. Germany, for example,
launched the Energiewende project in 2010, shutting
down coal-fired power plants and starting to invest in
wind power plants, a shift aimed at enabling
renewable energy. In fact, in 2018, the plant has
become Germany's most important source of energy.
In 2020, countries generate nearly 55.8% of the
energy from renewable sources, where they produce
wind energy with nearly 30.6% of the total energy
according to the “Fraunhofer Institute for Solar
Energy Systems (ISE)” (Fraunhofer Institute for
Solar Energy Systems ISE, 2021).
According to “European Union’s European Green
Deal” the EU set the goal in 2019 to make the climate
of Europe natural by 2050 where every country is
promised to phase out the use of fossil fuel by
installing green technology to promote a green
environment. Under this promise, Austria closed its
Economic Aspect of the Transition to Sustainable Energy Development
279
last coal energy plant in 2020, and Portugal phased
out its last gas energy production plant in June 2020.
Consequently, the EU reduced its gas emissions by
3.7% after switching energy production to natural
energy production, resulting in a 1.5% increase in
GDP (European Commission, 2021). This is one of
the most unusual examples of the rest of the world
increasing GDP by reducing gas emissions from
energy production.
While developing countries are far from these
changes, Nepal has already set an example in terms
of clean energy production. Nepal forecasts the
potential of hydropower in energy production to be
close to 43.3 GW. Bangladesh has a huge potential
for generating 50.2 GW of energy from the solar
system which is connected to the national grid.
Correspondingly, Albania also has the potential to
generate 16.5 GW of energy from renewable sources.
On the other hand, developing countries such as India
are investing heavily in coal energy production. If this
expansion could be translated into hydro and solar
production, it could reduce gas emissions and the
impact on the environment. These developing
countries could follow the example of the NordLink
power development project, in which a wind energy
production company is linked to a Norwegian
hydroelectric power plant. The project produces
renewable energy and is shared between the two
countries so that they can benefit together. Thus, this
event is another example of multilateral cooperation
between the two countries to increase renewable
energy production and reduce carbon emissions
(Adhikari, 2021).
The transition to sustainable energy development
can have sustainable effects on economic growth. In
2006, Berkeley Kammen examined the economic
revenue consequences of the U.S. economy's shift to
renewable energy development. Research shows that
they are achieving sustainable development by
promoting renewable energy production, earning
income, ensuring social well-being, and maintaining
the environment. Another study on the “The
economics of solar energy as renewable energy and
the economic effects of its investment in Egypt” was
conducted by Fawaz in 2014, which concluded that
the conventional system of energy production
through consuming fossil fuels will not meet the
growing demand of the energy. Hence, the study also
shows that there is a growing demand for renewable
energy sources, which will meet the demand for
renewable energy sources such as solar energy
(Salman and Hosny, 2021).
3 RESULTS AND DISCUSSION
To achieve sustainable energy production, countries
need to convert their energy production to renewable
energy. The commercial, household, transportation,
and industrial sectors should ensure the use of clean
and renewable energy. It is well known that the
domestic sector is a key sector that can be improved
through the consumption of renewable energy such as
solar energy. A sustainable energy development
policy ensures economic growth by mobilizing
resources through industrial insurrection,
technological advancement, and strategic changes.
Energy production is one of the main economic issues
of an economy, and growth depends on energy
production. The level of energy consumption will
definitely change the development pattern of the
entire economy. Shifting the energy sector to
sustainable energy consumption will ensure
economic growth by minimizing environmental
costs. It is well known that the domestic sector is a
key sector that can be improved through the
consumption of renewable energy such as solar
energy (Bulatova and Amirova, 2020).
A sustainable energy development policy ensures
economic growth by mobilizing resources through
industrial insurrection, technological advancement,
and strategic changes. Energy production is one of the
main economic issues of an economy, and growth
depends on energy production. The level of energy
consumption will definitely change the development
pattern of the entire economy. Shifting the energy
sector to sustainable energy consumption will ensure
economic growth by minimizing environmental
costs. Many tropical countries are increasing their
backup plans for natural biogas digesters caused by
human activities. To that end, the economy affects
this environmental cost and affects overall growth.
Sustainability ensures economic benefits in a number
of ways, such as saving the economy for
environmental costs, contributing to low-cost energy
supply, contributing long-term benefits to GDP,
conserving natural resources, and building a strong
sustainable economy. Correspondingly, sustainable
energy development policies have many benefits,
such as helping to increase employment opportunities
in the long term, which has become a major concern
in developing countries.
MMTGE 2022 - I International Conference "Methods, models, technologies for sustainable development: agroclimatic projects and carbon
neutrality", Kadyrov Chechen State University Chechen Republic, Grozny, st. Sher
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4 CONCLUSIONS
Though there has been much debate on the subject, it
is clear that with sustainable policies, it is possible to
change the current energy production by using fossil
fuels for sustainable energy production. It will
certainly change the environmental effect as well as
increase economic contribution in numerous ways,
such as GDP growth, reduce natural cost, increase job
offers, and ensure sustainable development.
Renewable energy production will improve overall
social welfare and human well-being, more than add
to GDP. If existing renewable energy production
could be doubled globally, GDP would be
significantly affected. It shows that a renewable
energy development strategy is economically viable
and able to contribute to a major part of the economy.
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