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Renewable Energy, Urbanization, and CO 2 Emissions: A Global Test

Author

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  • Urszula Gierałtowska

    (Department of Sustainable Finance and Capital Markets, Institute of Economics and Finance, University of Szczecin, 71-101 Szczecin, Poland)

  • Roman Asyngier

    (Department of Insurance and Investments, Faculty of Economics, Maria Curie-Sklodowska University in Lublin, 20-036 Lublin, Poland)

  • Joanna Nakonieczny

    (Department of Finance, Banking and Accountancy, The Faculty of Management, Rzeszow University of Technology, 35-959 Rzeszow, Poland)

  • Raufhon Salahodjaev

    (Department of Mathematical Methods in Economics, Tashkent State University of Economics, 49 O’zbekiston Shoh Ko’chasi, Tashkent 100066, Uzbekistan)

Abstract

A fixed effects regression and two-step system generalized method of moments (GMM) is used to analyze secondary data from the World Bank, covering 163 countries over the period from 2000 to 2016. The study tests the relationship between renewable energy, urbanization, and CO 2 emissions. The empirical results show that urbanization has an inverted U-shaped relationship with CO 2 emissions, while renewable energy consumption mitigates CO 2 emissions. If causal, a 1% increase in renewable energy use leads to a 1.2% decrease in CO 2 emissions. The results also show that the GDP per capita has an inverted U-shaped relationship with CO 2 emissions, confirming the environmental Kuznets curve (EKC). We also found that innovation, proxied by residents’ patents, has a non-linear effect on CO 2 emissions. As a policy implication, developing countries should increase the share of renewable energy in their total energy use, and promote innovative activities by increasing government spending on R&D.

Suggested Citation

  • Urszula Gierałtowska & Roman Asyngier & Joanna Nakonieczny & Raufhon Salahodjaev, 2022. "Renewable Energy, Urbanization, and CO 2 Emissions: A Global Test," Energies, MDPI, vol. 15(9), pages 1-13, May.
    • Handle: RePEc:gam:jeners:v:15:y:2022:i:9:p:3390-:d:809729
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    References listed on IDEAS

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