The impact of renewable energy on carbon emissions and economic growth in 15 major renewable energy-consuming countries

Closing the gap between carbon emissions and economic development is one of the solutions for reaching the sustainable development goals (SDGs). The role of renewable energy in rebalancing environmental and economic conditions is becoming a significant subject of some debates in the current discussi...

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Published in	Environmental research Vol. 186; p. 109567
Main Authors	Saidi, Kais, Omri, Anis
Format	Journal Article
Language	English
Published	Netherlands Elsevier Inc 01.07.2020
Subjects	carbon carbon dioxide CO2 emissions Economic growth issues and policy Major renewable energy-consuming countries Renewable energy renewable energy sources sustainable development Major renewable energy-consuming countries Renewable energy Economic growth CO2 emissions CO emissions
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Abstract	Closing the gap between carbon emissions and economic development is one of the solutions for reaching the sustainable development goals (SDGs). The role of renewable energy in rebalancing environmental and economic conditions is becoming a significant subject of some debates in the current discussion circles. Hence, the main purpose of this article is to use both growth and environmental functions to demonstrate the effectiveness of renewable energy in promoting economic growth and mitigating carbon emissions in the case of 15 major renewable energy-consuming countries using both fully modified ordinary least square (FMOLS) and vector error correction model (VECM) estimation techniques. The results of the FMOLS method show the efficiency of renewable energy in increasing economic growth and reducing carbon emissions. We also find, from the VECM Granger causality test, that there is (i) a bidirectional causality between economic growth and renewable energy inshort- and long-run for both estimated functions, validating the feedback hypothesis; (ii) no causal relationship between CO2 emissions and renewable energy in the long-run, but a bidirectional causality between the two variables is found in the short-run; (iii) a bidirectional relationship between economic growth and CO2 emissions is found in both short and long-run. Policy and practical implications and future research directions are also discussed. •Using the fully modified ordinary least square (FMOLS) and the vector error correction model (VECM) techniques.•A bidirectional causality between economic growth and renewable energy inshort and long-run for both models, validating the feedback hypothesis.•A bidirectional relationship between economic growth and CO2 emissions in both short and long run.•No causal relationship between CO2 emissions and renewable energy in the long run, but a bidirectional causality between the two variables is found in the short run.
AbstractList	Closing the gap between carbon emissions and economic development is one of the solutions for reaching the sustainable development goals (SDGs). The role of renewable energy in rebalancing environmental and economic conditions is becoming a significant subject of some debates in the current discussion circles. Hence, the main purpose of this article is to use both growth and environmental functions to demonstrate the effectiveness of renewable energy in promoting economic growth and mitigating carbon emissions in the case of 15 major renewable energy-consuming countries using both fully modified ordinary least square (FMOLS) and vector error correction model (VECM) estimation techniques. The results of the FMOLS method show the efficiency of renewable energy in increasing economic growth and reducing carbon emissions. We also find, from the VECM Granger causality test, that there is (i) a bidirectional causality between economic growth and renewable energy inshort- and long-run for both estimated functions, validating the feedback hypothesis; (ii) no causal relationship between CO₂ emissions and renewable energy in the long-run, but a bidirectional causality between the two variables is found in the short-run; (iii) a bidirectional relationship between economic growth and CO₂ emissions is found in both short and long-run. Policy and practical implications and future research directions are also discussed. Closing the gap between carbon emissions and economic development is one of the solutions for reaching the sustainable development goals (SDGs). The role of renewable energy in rebalancing environmental and economic conditions is becoming a significant subject of some debates in the current discussion circles. Hence, the main purpose of this article is to use both growth and environmental functions to demonstrate the effectiveness of renewable energy in promoting economic growth and mitigating carbon emissions in the case of 15 major renewable energy-consuming countries using both fully modified ordinary least square (FMOLS) and vector error correction model (VECM) estimation techniques. The results of the FMOLS method show the efficiency of renewable energy in increasing economic growth and reducing carbon emissions. We also find, from the VECM Granger causality test, that there is (i) a bidirectional causality between economic growth and renewable energy inshort- and long-run for both estimated functions, validating the feedback hypothesis; (ii) no causal relationship between CO2 emissions and renewable energy in the long-run, but a bidirectional causality between the two variables is found in the short-run; (iii) a bidirectional relationship between economic growth and CO2 emissions is found in both short and long-run. Policy and practical implications and future research directions are also discussed. •Using the fully modified ordinary least square (FMOLS) and the vector error correction model (VECM) techniques.•A bidirectional causality between economic growth and renewable energy inshort and long-run for both models, validating the feedback hypothesis.•A bidirectional relationship between economic growth and CO2 emissions in both short and long run.•No causal relationship between CO2 emissions and renewable energy in the long run, but a bidirectional causality between the two variables is found in the short run. Closing the gap between carbon emissions and economic development is one of the solutions for reaching the sustainable development goals (SDGs). The role of renewable energy in rebalancing environmental and economic conditions is becoming a significant subject of some debates in the current discussion circles. Hence, the main purpose of this article is to use both growth and environmental functions to demonstrate the effectiveness of renewable energy in promoting economic growth and mitigating carbon emissions in the case of 15 major renewable energy-consuming countries using both fully modified ordinary least square (FMOLS) and vector error correction model (VECM) estimation techniques. The results of the FMOLS method show the efficiency of renewable energy in increasing economic growth and reducing carbon emissions. We also find, from the VECM Granger causality test, that there is (i) a bidirectional causality between economic growth and renewable energy inshort- and long-run for both estimated functions, validating the feedback hypothesis; (ii) no causal relationship between CO2 emissions and renewable energy in the long-run, but a bidirectional causality between the two variables is found in the short-run; (iii) a bidirectional relationship between economic growth and CO2 emissions is found in both short and long-run. Policy and practical implications and future research directions are also discussed.Closing the gap between carbon emissions and economic development is one of the solutions for reaching the sustainable development goals (SDGs). The role of renewable energy in rebalancing environmental and economic conditions is becoming a significant subject of some debates in the current discussion circles. Hence, the main purpose of this article is to use both growth and environmental functions to demonstrate the effectiveness of renewable energy in promoting economic growth and mitigating carbon emissions in the case of 15 major renewable energy-consuming countries using both fully modified ordinary least square (FMOLS) and vector error correction model (VECM) estimation techniques. The results of the FMOLS method show the efficiency of renewable energy in increasing economic growth and reducing carbon emissions. We also find, from the VECM Granger causality test, that there is (i) a bidirectional causality between economic growth and renewable energy inshort- and long-run for both estimated functions, validating the feedback hypothesis; (ii) no causal relationship between CO2 emissions and renewable energy in the long-run, but a bidirectional causality between the two variables is found in the short-run; (iii) a bidirectional relationship between economic growth and CO2 emissions is found in both short and long-run. Policy and practical implications and future research directions are also discussed. Closing the gap between carbon emissions and economic development is one of the solutions for reaching the sustainable development goals (SDGs). The role of renewable energy in rebalancing environmental and economic conditions is becoming a significant subject of some debates in the current discussion circles. Hence, the main purpose of this article is to use both growth and environmental functions to demonstrate the effectiveness of renewable energy in promoting economic growth and mitigating carbon emissions in the case of 15 major renewable energy-consuming countries using both fully modified ordinary least square (FMOLS) and vector error correction model (VECM) estimation techniques. The results of the FMOLS method show the efficiency of renewable energy in increasing economic growth and reducing carbon emissions. We also find, from the VECM Granger causality test, that there is (i) a bidirectional causality between economic growth and renewable energy inshort- and long-run for both estimated functions, validating the feedback hypothesis; (ii) no causal relationship between CO emissions and renewable energy in the long-run, but a bidirectional causality between the two variables is found in the short-run; (iii) a bidirectional relationship between economic growth and CO emissions is found in both short and long-run. Policy and practical implications and future research directions are also discussed.
ArticleNumber	109567
Author	Omri, Anis Saidi, Kais
Author_xml	– sequence: 1 givenname: Kais surname: Saidi fullname: Saidi, Kais email: saidi.saidi2014@gmail.com organization: Department of Economics, Higher Institute of Management, University of Sousse, Tunisia – sequence: 2 givenname: Anis surname: Omri fullname: Omri, Anis email: a.omri@qu.edu.sa, elomrianis@gmail.com organization: Department of Business Administration, College of Business and Economics, Qassim University, P.O.Box: 6640, Buraidah, 51452, Qassim, Saudi Arabia
BackLink	https://www.ncbi.nlm.nih.gov/pubmed/32361260$$D View this record in MEDLINE/PubMed
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Snippet	Closing the gap between carbon emissions and economic development is one of the solutions for reaching the sustainable development goals (SDGs). The role of...
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SubjectTerms	carbon carbon dioxide CO2 emissions Economic growth issues and policy Major renewable energy-consuming countries Renewable energy renewable energy sources sustainable development
Title	The impact of renewable energy on carbon emissions and economic growth in 15 major renewable energy-consuming countries
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