The nexus between economic development and pollution in the European Union new member states. The role of renewable energy consumption

Abstract

In the context of recent environmental debates related to the impact of economic development on environment quality, this paper's aim is to explain the GHG emissions in few EU New Member States (Bulgaria, Slovakia, Slovenia, Czech Republic, Hungary, Romania and Poland) in the period 1990–2019 using a panel data approach (panel threshold and dynamic panel models) and a time series approach (vector error correction models). The importance of this study is related to the identification of paths to reduce pollution in order to manage climate challenges. The results indicate similarities and differences in terms of the impact of various indicators on the total GHG emissions and in the agricultural sector. There is a negative correlation between human development index/GDP and total GHG emissions when GDP growth is below and above 0.83%. Above this threshold estimate, there is a more strong and negative correlation between human development index and GHG emissions than below the threshold value. Below 1.41%, human development index and growth of value-added in agriculture do not influence pollution in agriculture. Above 1.41%, economic growth and change in value-added in agriculture positively influence the pollution in this sector. The relationship between GDP and GHG is inverted N-shaped for Bulgaria, Hungary, Czech Republic, Slovakia, Slovenia and Romania (sample countries), while the relationship between value-added in agriculture and GHG is N-shaped. This research confirms the U-shaped RKC at the national level and for agriculture in the sample countries, while an inversely U pattern was observed for Poland. Renewable energy consumption reduces total GHG emissions in the sample countries. Some policy proposals are indicated to promote a sustainable development in these countries with less pollution.