The nonlinear impact of renewable energy, fossil energy and CO2 emissions on human development index for the eight developing countries

Abstract

This study analyzes the impact of renewable energy, fossil energy, CO2 emissions, urbanization, international trade and industrialization on human development for the eight developing countries over the period 1990–2021 using Karavias and Tzavalis (2014) panel unit root test regarding structural breaks and cross-section dependence and feasible generalized least squares (FGLS) estimator technique. The countries of interest are Brazil, Russia, India, China, South Africa (BRICS countries) plus Egypt, Iran and Turkey while human development index is used as a measure of human development. The findings reveal that there exists a U-shaped relationship between renewable energy consumption and HDI an inverted U-shaped relationship between fossil energy/CO2 emissions and HDI is relevant. Moreover, the positive impact of urbanization, international trade and industrialization on HDI is determined. As for policy implications, the policies oriented to renewable energy and to reduce fossil energy dependence and CO2 emissions should be adopted to improve human development in the developing countries. Additionally, policies promoting urbanization, international trade, and industrialization are necessary to achieve high levels of human development, provided that the negative effects of these policies are mitigated.