How Economic Growth, Renewable Electricity and Natural Resources Contribute to CO2 Emissions?

How Economic Growth, Renewable Electricity and Natural Resources Contribute to CO2 Emissions?

12 October 2017 | Balsalobre-Lorente, Daniel and Shahbaz, Muhammad and Roubaud, David and Farhani, Sahbi
This study examines the relationship between economic growth and CO₂ emissions in the European Union 5 (EU-5) countries (Germany, France, Italy, Spain, and the United Kingdom) from 1985 to 2016. The authors use a carbon emission function to investigate the Environmental Kuznets Curve (EKC) hypothesis, which suggests an inverted U-shaped relationship between economic growth and environmental degradation. The empirical results confirm an N-shaped relationship, indicating that environmental degradation initially increases with economic growth, reaches a turning point, and then decreases. The study incorporates additional variables such as renewable electricity consumption, trade openness, natural resource abundance, and energy innovation. Renewable electricity consumption, natural resources, and energy innovation improve environmental quality, while trade openness and the interaction between economic growth and renewable electricity consumption increase CO₂ emissions. The study highlights the need for renewable energy regulations and energy innovation to reduce the negative impacts of fossil fuels on the environment. The findings provide insights into the dynamics of economic growth, environmental degradation, and the role of renewable energy in mitigating climate change.This study examines the relationship between economic growth and CO₂ emissions in the European Union 5 (EU-5) countries (Germany, France, Italy, Spain, and the United Kingdom) from 1985 to 2016. The authors use a carbon emission function to investigate the Environmental Kuznets Curve (EKC) hypothesis, which suggests an inverted U-shaped relationship between economic growth and environmental degradation. The empirical results confirm an N-shaped relationship, indicating that environmental degradation initially increases with economic growth, reaches a turning point, and then decreases. The study incorporates additional variables such as renewable electricity consumption, trade openness, natural resource abundance, and energy innovation. Renewable electricity consumption, natural resources, and energy innovation improve environmental quality, while trade openness and the interaction between economic growth and renewable electricity consumption increase CO₂ emissions. The study highlights the need for renewable energy regulations and energy innovation to reduce the negative impacts of fossil fuels on the environment. The findings provide insights into the dynamics of economic growth, environmental degradation, and the role of renewable energy in mitigating climate change.
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