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Mitigating CO2 Emissions: The Synergy of Foreign Direct Investment and Renewable Energy in Europe and Central Asia

Author

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  • Dagmar Skodova Parmová

    (Department of Applied Economics and Economy, Faculty of Economics, University of South Bohemia, Czech Republic)

  • Tulkin Teshabaev

    (Tashkent Institute of Finance, Uzbekistan)

  • Nargiza Kasimova

    (Tashkent Institute of Finance, Uzbekistan)

  • Raufhon Salahodjaev

    (Central Asian University, Uzbekistan; & Tashkent State University of Economics, Uzbekistan)

Abstract

This study investigates the impact of renewable energy and Foreign Direct Investment (FDI) on CO2 emissions across 45 countries in Europe and Central Asia for the period of 2000-2019. Utilizing the two-step system Generalized Method of Moments (GMM) estimator, our findings reveal that both FDI and renewable energy play pivotal roles in mitigating CO2 emissions. Notably, countries with higher levels of renewable energy integration experience a stronger reduction in CO2 emissions due to FDI. Furthermore, our analysis uncovers an inverted U-shaped relationship between GDP per capita and CO2 emissions, indicating a nuanced trajectory of environmental impact with economic growth. Additionally, our study identifies an inverse correlation between CO2 emissions and the agriculture sector as well as government size. The implications of these findings are discussed in the context of policy strategies, providing valuable insights for sustainable development in the Europe and Central Asia region.

Suggested Citation

  • Dagmar Skodova Parmová & Tulkin Teshabaev & Nargiza Kasimova & Raufhon Salahodjaev, 2024. "Mitigating CO2 Emissions: The Synergy of Foreign Direct Investment and Renewable Energy in Europe and Central Asia," International Journal of Energy Economics and Policy, Econjournals, vol. 14(1), pages 620-627, January.
    • Handle: RePEc:eco:journ2:2024-01-67
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    References listed on IDEAS

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    1. Alpon Satrianto & Akmil Ikhsan & Khairunnisa Abd Samad, 2024. "Analysis of Renewable Energy, Environment Quality and Energy Consumption on Economic Growth: Evidence from Developing Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 14(4), pages 57-65, July.
    2. Raufhon Salahodjaev & Avazbek Sadikov, 2024. "Examining the Nexus Between Renewable Energy, CO 2 Emissions, and Economic Factors: Implications for Countries Marked by High Rates of Coronary Heart Disease," Energies, MDPI, vol. 17(23), pages 1-12, December.

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    More about this item

    Keywords

    Renewable Energy; CO2 Emissions; Foreign Direct Investment; Europe and Central Asia;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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