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Energy efficiency a source of low carbon energy sources? Evidence from 16 high-income OECD economies

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  • Hassan, Taimoor
  • Song, Huaming
  • Khan, Yasir
  • Kirikkaleli, Dervis

Abstract

In the wake of global climate change and environmental degradation, an urgent action on a global scale is required to decarbonize the energy sector. From fossil fuel to renewables, energy efficiency and technological advancement are the most important factors responsible for an effective energy transformation. The present study investigates the magnitude of mitigating role of energy efficiency (EE), renewable energy (REC), technological advancement (ENVTECH) on Ecological footprint (ECFP) for the sixteen high-income economies of the Organization of Economic Cooperation and Development (OECD) over the period of 1990–2020 by employing various econometric estimations such as panel co-integration, Augmented Mean Group, Common Correlated Mean Group, Random effect, Fixed effect and Mean Group estimation techniques. Moreover, the role of gross domestic product (GDPP) is also observed as a proxy for economic growth. The empirical findings reveal that EE, REC, and ENVTECH improve environmental quality, whereas GDPP is a carrier of environmental degradation in the selected economies. Interestingly, energy efficiency holds the leading position among all observed factors to decarbonize and effectually transform the energy sector to greener production and consumption in the presence of environmentally friendly advancements in technology. The robustness tests results also support the findings of our basic empirical output. Furthermore, a unidirectional causality running from REC, GDPP, and ENVTECH to ECFP, whereas, a bi-directional causality between EE and ECFP is also validated. Any change in these factors will granger cause ECFP. The findings are of significant consequences as the selected OECD economies are expected to gain from energy transition to renewables enabled by energy efficiency and enhancement of environment-friendly technology in the near future.

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  • Hassan, Taimoor & Song, Huaming & Khan, Yasir & Kirikkaleli, Dervis, 2022. "Energy efficiency a source of low carbon energy sources? Evidence from 16 high-income OECD economies," Energy, Elsevier, vol. 243(C).
    • Handle: RePEc:eee:energy:v:243:y:2022:i:c:s0360544221033120
    DOI: 10.1016/j.energy.2021.123063
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