Renewable Energy, Urbanization, and CO 2 Emissions: A Global Test

Urszula Gierałtowska, Roman Asyngier, Joanna Nakonieczny and Raufhon Salahodjaev
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Urszula Gierałtowska: Department of Sustainable Finance and Capital Markets, Institute of Economics and Finance, University of Szczecin, 71-101 Szczecin, Poland
Roman Asyngier: Department of Insurance and Investments, Faculty of Economics, Maria Curie-Sklodowska University in Lublin, 20-036 Lublin, Poland
Joanna Nakonieczny: Department of Finance, Banking and Accountancy, The Faculty of Management, Rzeszow University of Technology, 35-959 Rzeszow, Poland

Energies, 2022, vol. 15, issue 9, 1-13

Abstract: A fixed effects regression and two-step system generalized method of moments (GMM) is used to analyze secondary data from the World Bank, covering 163 countries over the period from 2000 to 2016. The study tests the relationship between renewable energy, urbanization, and CO 2 emissions. The empirical results show that urbanization has an inverted U-shaped relationship with CO 2 emissions, while renewable energy consumption mitigates CO 2 emissions. If causal, a 1% increase in renewable energy use leads to a 1.2% decrease in CO 2 emissions. The results also show that the GDP per capita has an inverted U-shaped relationship with CO 2 emissions, confirming the environmental Kuznets curve (EKC). We also found that innovation, proxied by residents’ patents, has a non-linear effect on CO 2 emissions. As a policy implication, developing countries should increase the share of renewable energy in their total energy use, and promote innovative activities by increasing government spending on R&D.

Keywords: renewable energy; CO 2 emissions; urbanization; innovation; patents (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
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