Does Renewable Energy Sector Affect Industrialization-CO 2 Emissions Nexus in Europe and Central Asia?

Grzegorz Mentel, Waldemar Tarczyński, Marek Dylewski and Raufhon Salahodjaev
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Grzegorz Mentel: Department of Quantitative Methods, Faculty of Management, Rzeszow University of Technology, 35-959 Rzeszow, Poland
Waldemar Tarczyński: Department of Sustainable Finance and Capital Markets, Institute of Economics and Finance, University of Szczecin, 71-101 Szczecin, Poland
Marek Dylewski: Institute of Economics and Finance, WSB University in Poznan, Powstańców Wielkopolskich 5, 61-895 Poznan, Poland

Energies, 2022, vol. 15, issue 16, 1-12

Abstract: Current research assesses the impact of industrialization and the renewable energy sector on greenhouse gas emissions, proxied by CO 2 emissions in Europe and Central Asia. We rely on a two-step system GMM estimator on a sample of 48 countries over the period 2000–2018. Empirical results show that industrialization has a positive effect on CO 2 emissions: a 10% increase in industry value added as % of GDP leads to an increase of 2.6% in CO 2 emissions. In contrast, renewable energy mitigates CO 2 emissions. Ten percentage points increase in renewable energy consumption reduces CO 2 emissions per capita by 2.2%. The interaction term between renewable energy and industry value added is negative, suggesting that renewable energy consumption compensates for the negative effect of industrialization on environmental quality. Our main results also confirm the U-shaped inverted relationship between GDP per capita and CO 2 emissions. Our study has a number of policy implications and avenues for future research.

Keywords: industrialization; renewable energy; CO 2 emissions; Europe and Central Asia (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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