The effect of clean energy investment on CO2 emissions: Insights from a Spatial Durbin Model

Chunfei Weng, Jingong Huang and Matthew Greenwood-Nimmo

Energy Economics, 2023, vol. 126, issue C

Abstract: We estimate the direct and indirect effects of clean energy investment on carbon emissions using a Spatial Durbin Model fitted to a panel of 72 countries from 2000 to 2018. We find that a 1 percent increase in domestic clean energy investment reduces domestic carbon emissions by approximately 0.05 percent on average, controlling for country characteristics. However, this benefit is offset by a carbon leakage effect, whereby a 1 percent increase in clean energy investment among neighboring countries leads to about a 0.28 percent increase in domestic carbon emissions. This is suggestive of the outsourcing of pollution from one country to another and indicates that ad hoc policies to promote clean energy investment may be ineffective in achieving global emissions abatement. We conclude that a coordinated international policy framework is required to prevent jurisdiction-shopping by polluters.

Keywords: Clean energy investment; CO2 emissions; Carbon leakage effect; Spatial Durbin model (search for similar items in EconPapers)
JEL-codes: C13 C23 Q54 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S014098832300498X
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:126:y:2023:i:c:s014098832300498x

DOI: 10.1016/j.eneco.2023.107000

Access Statistics for this article

Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant

More articles in Energy Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().