The impact of renewable energy consumption and energy poverty on pollution in Central and Eastern European countries

Abstract

Considering the actual climate challenges, pollution should be reduced in Central and Eastern European countries (CEECs) from the European Union (EU). The main objective of this paper is to assess the impact of energy poverty and renewable energy consumption (REC) on pollution in 10 CEE countries, EU member states, during 2005-2022. The results based on the synthetic control method suggested that Renewable Energy Directive implemented in 2009 contributed to the decrease in the level of CO2 emissions in each CEEC compared to the states in this region that are not EU member states (Albania, Serbia, Moldova, North Macedonia, Georgia, Montenegro, Belarus, Ukraine). The panel regression analysis based on MG estimator showed that energy poverty enhanced CO2 emissions, while renewable energy consumption reduced it and had a mediating effect on the impact of energy poverty on pollution in the CEECs. The population unable to keep home warm, foreign direct investment and value added in industry had an asymmetric effect on CO2 emissions in the CEECs as method of moments quantile regressions suggest. These results are subject to policy proposals to tackle both pollution and energy poverty in the region.