A MULTIVARIATE ANALYSIS BETWEEN RENEWABLE ENERGY, CARBON EMISSION AND ECONOMIC GROWTH: NEW EVIDENCES FROM SELECTED MIDDLE EAST AND NORTH AFRICA COUNTRIES

This study examines the effects of renewable and non-renewable energy consumption and economic growth on CO2 emissions for 53 developing countries during the period 1990-2014. For this purpose, the study employs a two-step difference Generalized Method of Moments (GMM) approach. Empirical results show that there is an inverted U-shaped relationship between economic growth and CO2 emissions, which shows the validity of the environmental Kuznets curve (EKC) hypothesis. The effect of renewable energy consumption (REC) on CO2 emissions was found to be negative and significant, while the effect of non-renewable energy consumption (NREC) was positive and significant. Moreover, both renewable and non-renewable energy consumption positively affect economic growth. Thus, for developing countries aiming to reduce CO2 emissions and the consequent environmental pollution, it is necessary to reduce the share of NREC in total energy consumption and to increase the share of REC. Furthermore, because NREC positively affects economic growth, the efficiency of non-renewable energy resources should be increased in order not to damage the economic growth process while decreasing the use.

Does Governance Quality Moderate the Finance-Renewable Energy-Growth Nexus?: Evidence from Five Major Regions in the World

PurposeThe primary objective of this research is to assess the influence of financial development, institutional quality and renewable energy consumption on India’s carbon emissions.Design/methodology/approachThis study utilises econometric methodologies, specifically the autoregressive distributed lag (ARDL) model and Toda–Yamamoto causality tests, to explore the interplay among renewable and non-renewable energy consumption, financial development, economic growth, institutional quality, trade openness and carbon emissions in India spanning the years 1996–2019.FindingsThe research indicates that in India, greater utilisation of renewable energy, enhanced financial development and improved institutional quality are linked to lower carbon emissions. On the contrary, an escalation in carbon emissions is related to the consumption of non-renewable energy and greater trade openness. The Toda–Yamamoto causality tests reveal one-way causal relationships from institutional quality, financial development, non-renewable energy consumption and economic growth to CO2 emissions. Furthermore, the study identifies reciprocal causation, demonstrating that carbon dioxide emissions influence renewable energy consumption and trade openness.Research limitations/implicationsThis study recommends that forthcoming research expand its focus by integrating more comprehensive indicators such as consumption, production, transport-based CO2 emissions or ecological footprint. Additionally, to bolster the rigour of future inquiries, researchers might consider exploring alternative regression analysis methods like NARDL and STAR.Originality/valueThis study addresses a significant gap in the existing literature by being the first empirical investigation into the effects of renewable energy consumption, institutional quality and financial development on carbon emissions in the Indian economy. Unlike prior research, we consider a comprehensive financial development and institutional quality index, providing a more holistic perspective. This unique approach contributes valuable insights into the environmental challenges faced by the Indian economy, offering a nuanced understanding of the complex dynamics of environmental degradation in this region.

With the passage of time, the continued burning of fossil fuels is proving to be one of the world's most serious issues. In response, the current research aims to assess the critical linkage between carbon emissions and renewable energy, trade openness, and economic growth in Sweden utilizing a dataset from 1965 to 2019. The study applied the novel quantile-on-quantile regression (QQ) approach to assess this relationship. The main objectives are to address the following questions: (i) What are the effects of trade openness on CO2 emissions in each quantile? (ii) Does renewable energy consumption mitigates CO2 emissions in each quantile? What is the impact of economic growth on CO2 emissions in each quantile? The outcomes from the QQ approach revealed that at low and medium quantiles (0.1-0.6), the effect of trade openness on CO2 emissions is negative. Furthermore, at lower and higher quantiles (0.1-0.90) of combination of renewable energy consumption and CO2 emissions, the effect of renewable energy consumption on CO2 emissions is negative. Finally, at majority of the quantiles, the effect of economic growth on CO2 emissions is negative. Moreover, the present study applied the quantile regression (QR) approach as a robustness check. The findings of the QR validate the findings of the QQR approach. The study proposes that policy-makers in Sweden should place greater emphasis on raising public awareness regarding the issues of renewable energy since it mitigates environmental degradation.

Dynamic impact of renewable and non-renewable energy consumption on CO2 emission and economic growth in Saudi Arabia: Fresh evidence from wavelet coherence analysis

The continuous growth in CO2 emissions of nations around the globe has made achieving the aim of sustainable development extremely challenging. Therefore, the current research assesses the connection between CO2 emissions and economic complexity in the top 7 economic complexity countries while taking into account the role of economic growth, renewable energy consumption, and globalization for the period between 1993 and 2018. The research aims to answer the following questions: 1) What is the association between CO2 and the regressors in the long-run? 2) What are the effects of renewable energy consumption, economic growth, economic complexity, and globalization on CO2 emissions? The research utilized the CS-ARDL, CCEMG and panel causality approaches to investigate these interconnections. The empirical outcomes revealed that economic growth and economic complexity increase CO2 emissions while renewable energy consumption and globalization mitigate CO2 emissions. The outcomes of the causality test revealed a feedback causal connection between economic growth and CO2, while a unidirectional causality was established from economic complexity, globalization and renewable energy consumption to CO2 emissions in the top 7 economic complexity countries.

A significant obstacle to the scaling of renewable energy is the concern that increased consumption of renewable energy could have a negative impact on economic growth, due to the higher cost of renewable energy compared to fossil energy. To examine how exactly renewable energy consumption impacts economic growth, this study uses a non-linear panel threshold model with trade openness, financial development, and per capita income as threshold variables, to analyze the long-term non-linear relationship between renewable energy consumption and economic growth in 28 European Union countries from 2007 to 2017. The results show that (i) renewable energy consumption has significant threshold effect on economic growth. First, the effect of renewable energy consumption on economic growth is positive and significant if and only if it surpasses a certain threshold of trade openness. Second, a moderate financial development interval makes the consumption of renewable energy have a positive effect on economic growth, and if it is too low or too high, it will have a negative effect. Third, as for income level, the promoting effect of renewable energy consumption on economic growth is showing a "stepwise growth" feature, which means, when the income level surpasses its threshold value, the positive effect is strengthened. (ii) The results of the fixed-effects model show that, overall, renewable energy consumption promotes economic growth. (iii) The changes in the number of countries in different threshold intervals indicate that the positive impact of renewable energy consumption on economic growth in the EU is increasing.

PurposeThe study aims to explore the moderation effect of renewable energy consumption (REC) on the relationship between foreign direct investment (FDI) inflows and carbon emission (CO2). Furthermore, the study investigates the prevalence of rebound effect in energy efficiency for the top five FDI inbound destinations in the Asia-Pacific region.Design/methodology/approachThe study uses a balanced panel data set spanning from 1995 to 2020 obtained from the World Bank Database. This paper used feasible generalized least squares (FGLS) as the primary method, and to ensure the robustness of the findings, this paper used the panels corrected standard errors (PCSE) model.FindingsThe findings reveal a negative relationship between FDI and CO2 emissions and REC and CO2 emissions. However, the moderation effect of REC on the relationship between FDI inflows and CO2 emissions is positive, suggesting that when both FDI and REC increase simultaneously, carbon emissions also increase. This study attributes the observed positive moderation effect to the phenomenon known as the rebound effect.Research limitations/implicationsFDI fosters environmental sustainability. Regions’ FDI policies can be guidelines for other nations aiming for similar outcomes. REC reduces CO2 emissions, underlining renewable energy’s efficacy. However, positive moderation effect of REC on the relationship between FDI and CO2 emissions highlights the necessity for balanced policies to prevent unintended consequences like the rebound effect.Originality/valueThe originality of this study lies in examining the prevalence of rebound effect in energy efficiency. Prior empirical studies have explored the relationship between REC and carbon emission and established that increased efficiency in renewable energy creates positive environmental and climate externalities. However, it is constrained by rebound effects and this has been ignored by previous studies.

Prior research has explored the influence of renewable consumption on economic growth and carbon emissions (CO2), but few studies have examined the impact of both renewable energy consumption (REC) and renewable energy production (REP) on economic growth and CO2 emissions in Africa. The objective of this work is to dynamically estimate the effects of both REC and REP on economic growth and CO2 emissions in Africa, based on empirical evidence and using a data set from the years 1965 to 2020. This research aims to determine how REC and REP affect the economies and ecosystems of Africa. The Error Correction Models (ECMs) were utilized in the analysis, focusing on howREP and REC influence economic growth and environmental carbon dioxide emissions (CO2). Vector Error Correction Models (VECM) and Johansen cointegration methods were used on the data set. The results demonstrated that economic forces existed between the variables and that there was a long run equilibrium relationship between GDP and CO2 emissions in Africa, from REC to REP. Additionally, the outcomes showed that both REC and REP slowed down environmental deterioration while promoting economic growth. Africa can lower the negative impacts of environmental pollution caused by the consumption of nonrenewable energy sources by adopting and aggressively promoting renewable energy production and utilization.

Renewable energy consumption and economic growth nexus: Evidence from a threshold model

Foreign direct investment and renewable energy in climate change mitigation: Does governance matter?

Symmetric and asymmetric impact of economic growth, capital formation, renewable and non-renewable energy consumption on environment in OECD countries

Renewable energy consumption and economic growth in OECD countries: A nonlinear panel data analysis

PurposeToday, the increasing use of fossil fuels, energy security, concerns and the great importance of achieving sustainable economic growth underscore the urgent need to transition to a green energy system as soon as possible. To shed light on the relationship between the economy and renewable energy, this study assesses the nonlinear relationship between renewable energy consumption and economic growth for 24 OECD countries between 1990 and 2015.Design/methodology/approachThe authors apply two nonlinear models: panel threshold regression (PTR) and panel smooth transition regression (PSTR).FindingsThe results show that the positive effect of renewable energy consumption on economic growth is conditional. On the one hand, the results of the nonlinear PTR model yielded a threshold value for renewable energy consumption of about 251.17. Below this threshold, the authors find a negative impact of renewable energy consumption on economic growth. However, above this threshold, renewable energy consumption becomes a favorable source of economic growth. Using the nonlinear PSTR model based on the gamma transition parameter of 2.014, the transition from low renewable energy consumption regime to higher is abrupt.Originality/valueReferring to previous studies analyzing linear causality between renewable energy and economic growth, most of the results show various mixed and non-stable effects over the study period. The contributions of this study consist in conduct a series of empirical tests of the nonlinear effects of renewable energy use on economic growth using two nonlinear approaches such as the PTR and PSTR models. If the authors show that such a relationship is nonlinear, it is essential to check whether the transition from one weak regime to another strong regime is abrupt or smooth, using the PSTR approach.

The International Energy Agency revealed in its report in 2021 that the world energy-CO2 emission reached its highest peak during that year. This statistic shows the need to set new environmental protection policies and improve the current ones. Hence, our study aims to highlight the leading role of human capital in the fight against climate change. To do so, by using the Feasible Generalized Least Squares and the Two-Stage Least Squares estimators, we analyze the moderating impact of human capital on the link between renewable energy, nonrenewable energy, economic growth, and CO2 emissions in the case of the 20 newly emerging market economies for the period 1990–2021. We find negative effects of renewable energy consumption, industrialization and trade openness on CO2 emissions. We also find positive effects of nonrenewable energy consumption, economic growth, and human capital on CO2 emissions. In addition, our findings reveal that renewable energy consumption and human capital are complementary levers for reducing CO2 emissions, whereas human capital mitigates the detrimental effect of nonrenewable energy consumption on environmental quality. Besides, the results underline that human capital has an inverted U-shaped effect on CO2 emissions. Regarding policy implications, policymakers should emphasize the complementarity between human capital and renewable energy consumption by facilitating the accumulation of human capital towards productive investments and the use of renewable energy technologies in these countries. They should also raise people’s environmental awareness by implementing educational reforms, effective environmental awareness campaigns, and government regulatory pressures that help people understand global warming issues and adopt environmentally friendly practices in their daily activities. Finally, policymakers should promote the use of renewable energy rather than non-renewable energy sources in the production of goods and services by obliging countries to integrate green policies into their industrialization and trade openness strategies.