Heterogeneity of the impact of energy production and consumption on national greenhouse gas emissions

Abstract

This research investigates the relationship between greenhouse gas (GHG) emissions and energy production and consumption patterns in 122 countries over the period from 1990 to 2020. Particular attention is paid to the role of different types of energy, including renewable, hydro and nuclear energy, as well as oil, gas and coal, in shaping GHG emissions. Unlike previous studies, the paper analyzes the full range of energy resources and focuses on different quantiles of data using the quantile-quantile regression (QQR) method. The results of this approach are compared with traditional quantile regression (QR) to assess its validity. Among the findings of this study are: (1) different parts of the energy mix have a heterogeneous impact on GHG emissions in different quantiles; (2) energy consumption patterns play a more significant role in shaping GHG emissions than production patterns; (3) increasing production and consumption of fossil fuels does not necessarily increase GHG emissions; (4) similarly, the development of renewable energy sources is not always accompanied by a reduction in GHG emissions. Our general conclusion is that existing climate policy requires significant diversification to not be focused only on renewable energy, which impact on GHG emissions is not as homogeneous as it usually considered, and which cannot solve the problem of raising emissions solely. Instead of this, it could be more rational to focus on the searching the ways of hydrocarbon industries sustainable development and support them in this journey, especially in the field of Scope 2 and Scope 3 operations management.