Selection of Renewable Energy Sources for Sustainable Development and an Economic Model Proposal for Countries

Selection of Renewable Energy Sources for Sustainable Development and an Economic Model Proposal for Countries

Alptekin Ulutaş (Cumhuriyet University, Turkey) and Coşkun Karaca (Cumhuriyet University, Turkey)
DOI: 10.4018/978-1-5225-5787-6.ch004


Meeting the energy requirements with imported fuels leads to economic and political problems in the countries. Therefore, renewable energy investments continue to grow globally as a sustainable and increasingly economically viable alternative to conventional sources of energy. This study aims to reduce the share of imported fuels in Turkey's electricity generation and to estimate the employment gain to be provided by renewable energy investments to be established instead. Approximately 900,000 jobs are created during the production, construction, operational, and maintenance phases of additional 49,448 MW capacity renewable power plants to be installed. While analyzing, the decision on how much to invest in which renewable resource is determined with respect to multi-criteria decision making (MCDM) model.
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Countries have many alternative energy sources to meet their energy demands. Currently, a total of 78.3% of the global energy demand is met by fossil fuels, while 19.2% is met by renewable energy and 2.5% by nuclear energy. Nevertheless, debates about sustainable development over the last 40 years have indicated that fossil fuels with such a high share of final energy consumption are obstacles to the development of countries. At the base of these discussions are the harmful effects of fossil fuels on the environment and human health, as well as the economic and social problems that they result in the countries.

The first effect of fossil fuels on the environment and human health are the harmful greenhouse gases that are revealed by the consumption of these fuels. According to the Environment Protection Authority (EPA) data, the share of fossil fuels in greenhouse gas emissions is 79.4% (EESI, 2016). Measurements made by the US Energy Information Administration (EIA) in 2014 validate these data and these measurements show a significant portion of gases, such as the carbon dioxide, methane and nitrogen gas (EIA, 2016) that constitute 97.4% of the greenhouse gas is emitted by the burning of fossil fuels (EWEA, 2008a, pp. 326-327). When it is thought that air pollution has a significant share in global environmental disasters and human deaths, it is clear how dangerous results are caused by consumption of fossil fuels according to these data.

For example, Hurricane Katrina in 2005 in the USA caused 1,836 people to lose their lives and result in US$81 billion in material damage in the country. Additionally, the World Bank data has illustrated that air pollution increases the risk of people catching many fatal diseases. According to recent estimates, about 5.5 million premature deaths worldwide have been caused by air pollution. This data indicates that one out of every 10 premature deaths is owing to air pollution (World Bank, 2016a, p. 22).

The consumption of fossil fuels has negative effects on the environment as well as on the economy. One of these is the problem of foreign trade deficit. If the countries meet their energy demands by import, the security of energy supply run into danger. Moreover, the increases in prices of oil and natural gas causes damage to the production and national output in the importer countries, leading to an increase in foreign trade deficit. The most notable example of this was the oil crisis in October, 1973, and the increase in energy prices in this period led to an increase in production costs, resulted in energy supply inflation and deterioration of macroeconomic balances in many countries.

Another problem arising in fossil fuel importer countries due to the import of energy is the employment problem which creats both economic and social costs on countries. The countries, which export fossil fuel to other nations, take employment opportunity in the steps of this process, such as extraction, processing and relocation of these sources. On the other hand, countries that do not use their own energy resources face a significant opportunity cost. Many studies investigating the relationship between import dependency ratio and unemployment show that this relationship is linear and that imports lead to unemployment (e.g., Stone et al., 2013; De Pinto, 2014; Kostecki, 2014).

Another alternative to meet energy demand is nuclear energy. These plants are preferred by the countries as they have the high energy efficiency. However, the risks of nuclear accidents, nuclear waste of high radioactivity, and the cost of safely storing nuclear energy clearly demonstrate that these plants are not a suitable source of energy for sustainable development. Countries currently desire to realize development model and it is difficult that this model continue with an energy model consisting of fossil fuels and nuclear energy due to the aforementioned reasons.

Because of the above-mentioned challenges, the aim of this study is to propose an economic model to help the development of countries. This model suggests abandoning fossil fuels and substituting renewable energy sources in meeting the energy needs of countries. The additional investments that will be made with such a transformation stimulate the national income of the country and they also solve the unemployment problem.

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