The Effect of Renewable Energy Development on Carbon Emission Reduction: An Empirical Analysis for the EU-15 Countries

Shahrouz Abolhosseini, Almas Heshmati () and Jörn Altmann

No 7989, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: The increased concerns about climate change have made renewable energy sources an important topic of research. Several scholars have applied different methodologies to examine the relationships between energy consumption and economic growth of individual and groups of countries and to analyze the environmental effects of energy policies. Previous studies have analyzed carbon emission savings, using renewable energy usage as an individual source or in combination with traditional sources of energy (e.g., hybrid plants) in connection with lifecycle analysis methods. It is shown that after a certain period, economic growth leads to the promotion of environmental quality. However, econometric modelling critiques have opposed the results of these studies. One reason is that the effectiveness of governance-related parameters has previously been neglected. In this research, we analyze the impact of renewable energy development on carbon emission reduction. We estimate a model to evaluate the effectiveness of renewable energy development, technological innovation, and market regulations in carbon emission reduction. The empirical results are based on a panel data estimation using the EU-15 countries data observed from 1995 to 2010. The elasticities of CO2 emissions are estimated, in order to evaluate the effectiveness of each parameter. The findings show that the effects of a negative climate change could be mitigated by governance-related parameters instead of economic development.

Keywords: carbon emission; environmental tax; technological innovation; renewable energy; economic growth (search for similar items in EconPapers)
JEL-codes: D62 H23 N50 O13 O14 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2014-02
New Economics Papers: this item is included in nep-ene, nep-env, nep-eur and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Published - published as 'Impact of Renewable Energy Development on Carbon Dioxide Emission Reduction' in: The Development of Renewable Energy Sources and its Significance for the Environment, 2015, pp. 119-146

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Working Paper: The Effect of Renewable Energy Development on Carbon Emission Reduction: An Empirical Analysis for the EU-15 Countries (2014)
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