Nexus between clean energy consumption, economic growth and CO2 emissions

Abstract

Abstract To investigate the nexus among clean energy consumption, economic growth and CO2 emissions, a newly developed bootstrap ARDL bounds test with structural breaks is employed to survey the cointegration and causality for G7 countries. We find no cointegration among real GDP per capita, clean energy consumption and CO2 emissions in Canada, France, Italy, the US and the UK. However, cointegration exists in Germany when real GDP per capita and CO2 emissions serve as dependent variables and in Japan when CO2 emissions is the dependent variable. Regarding the results of causality test that we find clean energy consumption causes real GDP per capita for Canada, Germany and the US and CO2 emissions causes clean energy consumption for Germany. Besides, we find feedbacks between clean energy consumption and CO2 emissions for Germany, and unidirectional causality running from clean energy consumption to CO2 emissions for the US. Our study has important policy implications for G7 countries conducting efficient energy-use strategy to reduce CO2 emissions.