Exploring the role of solar energy and foreign direct investment for clean environment: Evidence from top 10 solar energy consuming countries

• Published in: Renewable energy Vol. 185; pp. 147 - 158
• Main Authors: Yasmeen, Rizwana, Yao, Xing, Ul Haq Padda, Ihtsham, Shah, Wasi Ul Hassan, Jie, Wanchen
• Format: Journal Article
• Language: English
• Published: Elsevier Ltd 01.02.2022
• Subjects: Environmental Kuznets curve; Foreign direct investment inflow; Induced-FDI effects; Induced-income effects; Solar energy; Induced-income effects; Environmental Kuznets curve; Induced-FDI effects; Solar energy; Foreign direct investment inflow
• ISSN: 0960-1481; 1879-0682
• DOI: 10.1016/j.renene.2021.12.048

Solar energy has become well-documented and famous globally despite high upfront costs and a lack of financing mechanisms. Solar power can keep sustainable economic growth by fulfilling the increasing worldwide demand for energy while addressing climate change and reducing emissions. On the other side, Foreign Direct Investment (FDI) is a crucial source of promoting energy-efficient technologies across the world. This study explores the role of solar energy consumption and the impact of FDI for a clean environment in the top ten solar energy-consuming countries from 1990 to 2018. The significance of this study is that it uses a cubic form of income and FDI to account for technique, scale and cumulative effects on CO2 emissions. The results depict N-shaped Environmental Kuznets Curve between income and CO2 emissions. The foreign direct investment inflows play a positive role in boosting the environment quality. Due to the strong structure of institutions, FDI inflows can be a source of solar technology promotion. However, other aspects like the size of GDP linked to the environment can't be ignored. Thus for a clean environment, countries still need to implement more energy-efficient policies for "sustainable development." •We explore the role of solar energy consumption for clean environment.•Further, the Study find induced income effects and induced FDI effects.•The study uses cubic form of income and FDI to assess environment impact.•The results depict N-shaped EKC between income and CO2 emissions.•Overall, the impact of foreign direct investment on environment is positive.