Nexus between carbon emissions, energy consumption, and economic growth: Evidence from global economies

Abstract

Renewable energy holds a remarkable role in clean energy adaptation due to the much lower carbon footprint it releases compared to other fossil fuels. It also has a positive impact by slowing down the rate of climate change. The study has examined the links between renewable and non-renewable energy use, CO2 emissions and economic growth in developed, developing, and LDCs and Economies in Transition between 1990 and 2019 in 152 countries. Granger-causality has been used as the methodology to investigate the link between the variables. The findings of the existing studies on the relationship between the consumption of renewable and non-renewable energy sources and economic growth are inconsistent, indicating that there may or may not be a relationship between the two factors. Apart from having a few empirical studies so far have examined the link between the above-mentioned variables, analysis has yet to encompass all the regions in the four sub-groups discussed above. The results indicated that no Granger-causal relationship exists between GDP and REC outside of Economies in Transition. Additionally, the GDP and CO2 of all countries have a one-way relationship. Nevertheless, research indicates that GDP and CO2 have a bi-directional link in Economies in Transition, a uni-directional relationship in developing countries, and no meaningful association in developed and LDCs. Therefore, it is essential to emphasise actions to lower CO2 emissions and develop renewable energy while also stimulating the economy. Ultimately, more nations should choose renewable energy sources to build a more sustainable future.