The effect of renewable energy on carbon emissions through globalization

Abstract

The sustainability of the environment debate cannot be addressed without considering the type of energy to use. The pace at which the world is industrializing, globalizing, and developing economically has prompted many researchers to investigate the kind of energy required to preserve the environment. In this regard, this study employs the mediation model to assess renewable energy's direct and indirect effects on carbon emissions through globalization. The data for the study is from 1990 to 2020. The study's findings showed that while renewable energy has no appreciable impact on trade openness, it directly and negatively affects carbon emissions. However, foreign direct investment has a direct and significant positive effect on carbon emissions, while trade openness has no significant effect. The indirect result revealed that renewable energy through foreign direct investment has a negative effect on carbon emissions; however, renewable energy through trade openness has a positive effect on carbon emissions. Policymakers are encouraged to restrict the trade sector to reduce the trading of high-emission technologies.