IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v17y2025i7p3010-d1622590.html
   My bibliography  Save this article

Renewable Investments, Environmental Spending, and Emissions in Eastern Europe: A Spatial-Economic Analysis of Management and Policy Decisions Efficiency

Author

Listed:
  • Bogdan Nichifor

    (Facultatea de Stiinte Economice, Universitatea Vasile Alecsandri din Bacau, Calea Marasesti 157, 600115 Bacau, Romania)

  • Luminita Zait

    (Facultatea de Stiinte Economice, Universitatea Vasile Alecsandri din Bacau, Calea Marasesti 157, 600115 Bacau, Romania)

  • Ovidiu Turcu

    (Facultatea de Stiinte Economice, Universitatea Vasile Alecsandri din Bacau, Calea Marasesti 157, 600115 Bacau, Romania)

Abstract

The transition to a low-carbon economy is a key challenge for Eastern Europe, where economic growth, energy investments, and emission reduction policies interact in complex ways. This study employs a spatial econometric approach to assess the effectiveness of renewable energy investments and government environmental spending in mitigating CO 2 emissions across the region. Using panel data and spatial Durbin models (SDMs), we identify significant spillover effects in emissions reduction, revealing those environmental policies in one country influence neighboring regions. The results indicate that renewable investments have a positive but localized impact on emissions reduction, whereas government environmental expenditure exhibits diminishing returns beyond a threshold of 0.01 GDP. Threshold regression analysis confirms that excessive spending may lead to inefficiencies, reversing its expected benefits. Additionally, stochastic frontier analysis (SFA) highlights disparities in energy efficiency, with some countries demonstrating stronger optimization strategies than others. These findings underscore the importance of policy coordination and targeted investment strategies to enhance the effectiveness of decarbonization efforts. Strengthening regional cooperation and optimizing environmental expenditure allocation can significantly improve sustainability outcomes in Eastern Europe.

Suggested Citation

  • Bogdan Nichifor & Luminita Zait & Ovidiu Turcu, 2025. "Renewable Investments, Environmental Spending, and Emissions in Eastern Europe: A Spatial-Economic Analysis of Management and Policy Decisions Efficiency," Sustainability, MDPI, vol. 17(7), pages 1-33, March.
    • Handle: RePEc:gam:jsusta:v:17:y:2025:i:7:p:3010-:d:1622590
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/17/7/3010/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/17/7/3010/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Stefan Ćetković & Aron Buzogány, 2016. "Varieties of capitalism and clean energy transitions in the European Union: When renewable energy hits different economic logics," Climate Policy, Taylor & Francis Journals, vol. 16(5), pages 642-657, July.
    2. Min Zhang & Kashif Raza Abbasi & Nasiru Inuwa & Crenguta Ileana Sinisi & Rafael Alvarado & Ilknur Ozturk, 2023. "Does economic policy uncertainty, energy transition and ecological innovation affect environmental degradation in the United States?," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 36(2), pages 2177698-217, July.
    3. Dimanchev, Emil & Knittel, Christopher R., 2023. "Designing climate policy mixes: Analytical and energy system modeling approaches," Energy Economics, Elsevier, vol. 122(C).
    4. Xiufan Zhang & Decheng Fan, 2022. "The Spatial-Temporal Evolution of China’s Carbon Emission Intensity and the Analysis of Regional Emission Reduction Potential under the Carbon Emissions Trading Mechanism," Sustainability, MDPI, vol. 14(12), pages 1-29, June.
    5. Özgür Bayram Soylu & Tomiwa Sunday Adebayo & Dervis Kirikkaleli, 2021. "The Imperativeness of Environmental Quality in China Amidst Renewable Energy Consumption and Trade Openness," Sustainability, MDPI, vol. 13(9), pages 1-22, April.
    6. Chengyu Han & Zhaolin Gu & Hexiang Yang, 2021. "EKC Test of the Relationship between Nitrogen Dioxide Pollution and Economic Growth—A Spatial Econometric Analysis Based on Chinese City Data," IJERPH, MDPI, vol. 18(18), pages 1-16, September.
    7. Wei Wei & Ling He & Xiaofan Li & Qi Cui & Hao Chen, 2022. "The Effectiveness and Trade-Offs of Renewable Energy Policies in Achieving the Dual Decarbonization Goals in China: A Dynamic Computable General Equilibrium Analysis," IJERPH, MDPI, vol. 19(11), pages 1-18, May.
    8. Mihaela Peres & Waqar Ameer & Helian Xu, 2018. "The impact of institutional quality on foreign direct investment inflows: evidence for developed and developing countries," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 31(1), pages 626-644, January.
    9. Javier Arnaut & Johanna Lidman, 2021. "Environmental Sustainability and Economic Growth in Greenland: Testing the Environmental Kuznets Curve," Sustainability, MDPI, vol. 13(3), pages 1-13, January.
    10. Polzin, Friedemann & Egli, Florian & Steffen, Bjarne & Schmidt, Tobias S., 2019. "How do policies mobilize private finance for renewable energy?—A systematic review with an investor perspective," Applied Energy, Elsevier, vol. 236(C), pages 1249-1268.
    11. Gustavo Pineiro-Villaverde & María Teresa García-Álvarez, 2022. "Impact of Clean Energy Policies on Electricity Sector Carbon Emissions in the EU-28," Energies, MDPI, vol. 15(3), pages 1-14, January.
    12. Shunbin Zhong & Huafu Shen & Ziheng Niu & Yang Yu & Lin Pan & Yaojun Fan & Atif Jahanger, 2022. "Moving towards Environmental Sustainability: Can Digital Economy Reduce Environmental Degradation in China?," IJERPH, MDPI, vol. 19(23), pages 1-23, November.
    13. Weng, Chunfei & Huang, Jingong & Greenwood-Nimmo, Matthew, 2023. "The effect of clean energy investment on CO2 emissions: Insights from a Spatial Durbin Model," Energy Economics, Elsevier, vol. 126(C).
    14. Pablo Ponce & José Álvarez-García & Johanna Medina & María de la Cruz del Río-Rama, 2021. "Financial Development, Clean Energy, and Human Capital: Roadmap towards Sustainable Growth in América Latina," Energies, MDPI, vol. 14(13), pages 1-16, June.
    15. Haider Mahmood, 2022. "Trade Openness, Industrialization, Urbanization and Pollution Emissions in GCC countries: A Way Towards Green and Circular Economies," International Journal of Energy Economics and Policy, Econjournals, vol. 12(2), pages 309-314, March.
    16. Klaas Lenaerts & Simone Tagliapietra & Guntram B. Wolff, 2022. "The Global Quest for Green Growth: An Economic Policy Perspective," Sustainability, MDPI, vol. 14(9), pages 1-14, May.
    17. Rongrong Li & Min Su, 2017. "The Role of Natural Gas and Renewable Energy in Curbing Carbon Emission: Case Study of the United States," Sustainability, MDPI, vol. 9(4), pages 1-18, April.
    18. Vaclovas Miskinis & Arvydas Galinis & Viktorija Bobinaite & Inga Konstantinaviciute & Eimantas Neniskis, 2023. "Impact of Key Drivers on Energy Intensity and GHG Emissions in Manufacturing in the Baltic States," Sustainability, MDPI, vol. 15(4), pages 1-25, February.
    19. Mortaza Ojaghlou & Erginbay Ugurlu & Marta Kadłubek & Eleftherios Thalassinos, 2023. "Economic Activities and Management Issues for the Environment: An Environmental Kuznets Curve (EKC) and STIRPAT Analysis in Turkey," Resources, MDPI, vol. 12(5), pages 1-14, April.
    20. Chanyuan Liu & Long Xin & Jinye Li & Huaping Sun, 2022. "The Impact of Renewable Energy Technology Innovation on Industrial Green Transformation and Upgrading: Beggar Thy Neighbor or Benefiting Thy Neighbor," Sustainability, MDPI, vol. 14(18), pages 1-28, September.
    21. Eko Supriyanto & Jayan Sentanuhady & Wisnu Hozaifa Hasan & Ariyana Dwiputra Nugraha & Muhammad Akhsin Muflikhun, 2022. "Policy and Strategies of Tariff Incentives Related to Renewable Energy: Comparison between Indonesia and Other Developing and Developed Countries," Sustainability, MDPI, vol. 14(20), pages 1-17, October.
    22. Klaus Pforr, 2014. "femlogit-Implementation of the multinomial logit model with fixed effects," Stata Journal, StataCorp LLC, vol. 14(4), pages 847-862, December.
    23. Tong Shu & Chunfen Huang & Shou Chen & Shouyang Wang & Kin Keung Lai, 2018. "Trade-Old-for-Remanufactured Closed-Loop Supply Chains with Carbon Tax and Government Subsidies," Sustainability, MDPI, vol. 10(11), pages 1-25, October.
    24. Yunlong Liu & Leiyu Chen & Chengfeng Huang, 2022. "Study on the Carbon Emission Spillover Effects of Transportation under Technological Advancements," Sustainability, MDPI, vol. 14(17), pages 1-13, August.
    25. Sunjoo Park, 2015. "State Renewable Energy Governance: Policy Instruments, Markets, or Citizens," Review of Policy Research, Policy Studies Organization, vol. 32(3), pages 273-296, May.
    26. Bei Xiong & Ruimei Wang, 2020. "Effect of Environmental Regulation on Industrial Solid Waste Pollution in China: From the Perspective of Formal Environmental Regulation and Informal Environmental Regulation," IJERPH, MDPI, vol. 17(21), pages 1-17, October.
    27. Bartosz Jóźwik & Antonina-Victoria Gavryshkiv & Phouphet Kyophilavong & Lech Euzebiusz Gruszecki, 2021. "Revisiting the Environmental Kuznets Curve Hypothesis: A Case of Central Europe," Energies, MDPI, vol. 14(12), pages 1-17, June.
    28. Jing Song & Mengyuan Li & Shaosong Wang & Tao Ye, 2022. "To What Extent Does Environmental Regulation Influence Emission Reduction? Evidence from Local and Neighboring Locations in China," Sustainability, MDPI, vol. 14(15), pages 1-9, August.
    29. Mihail Busu, 2019. "The Role of Renewables in a Low-Carbon Society: Evidence from a Multivariate Panel Data Analysis at the EU Level," Sustainability, MDPI, vol. 11(19), pages 1-16, September.
    30. Yanhong Liu & Jia Lei & Yihua Zhang, 2021. "A Study on the Sustainable Relationship among the Green Finance, Environment Regulation and Green-Total-Factor Productivity in China," Sustainability, MDPI, vol. 13(21), pages 1-27, October.
    31. Aleksy Kwilinski & Olena Dobrovolska & Tomasz Wołowiec & Wiktor Cwynar & Iryna Didenko & Artem Artyukhov & Oleksandr Dluhopolskyi, 2024. "Carbon Dioxide, Nitrous Oxide, and Methane: What Types of Greenhouse Gases Are Most Affected by Green Investments and Renewable Energy Development?," Energies, MDPI, vol. 17(4), pages 1-18, February.
    32. Nutnaree Maneejuk & Sutthipat Ratchakom & Paravee Maneejuk & Woraphon Yamaka, 2020. "Does the Environmental Kuznets Curve Exist? An International Study," Sustainability, MDPI, vol. 12(21), pages 1-22, November.
    33. Zakia Batool & Sajjad Ali & Abdul Rehman, 2022. "Environmental Impact of ICT on Disaggregated Energy Consumption in China: A Threshold Regression Analysis," Sustainability, MDPI, vol. 14(23), pages 1-17, November.
    34. Xuan Chang & Jinye Li, 2022. "Effects of the Digital Economy on Carbon Emissions in China: A Spatial Durbin Econometric Analysis," Sustainability, MDPI, vol. 14(24), pages 1-20, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Elie, Luc & Granier, Caroline & Rigot, Sandra, 2021. "The different types of renewable energy finance: A Bibliometric analysis," Energy Economics, Elsevier, vol. 93(C).
    2. Zuzanna Kłos-Adamkiewicz & Elżbieta Szaruga & Agnieszka Gozdek & Magdalena Kogut-Jaworska, 2023. "Links between the Energy Intensity of Public Urban Transport, Regional Economic Growth and Urbanisation: The Case of Poland," Energies, MDPI, vol. 16(9), pages 1-25, April.
    3. Wan, Qilong & Miao, Xiaodong & Afshan, Sahar, 2022. "Dynamic effects of natural resource abundance, green financing, and government environmental concerns toward the sustainable environment in China," Resources Policy, Elsevier, vol. 79(C).
    4. Nuno Carlos Leitão, 2021. "The Effects of Corruption, Renewable Energy, Trade and CO 2 Emissions," Economies, MDPI, vol. 9(2), pages 1-19, April.
    5. Jordaan, Sarah M. & Park, Jiyun & Rangarajan, Shreya, 2022. "Innovation in intermittent electricity and stationary energy storage in the United States and Canada: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 158(C).
    6. Wen, Jun & Yin, Hua-Tang & Chang, Chun-Ping & Tang, Kai, 2024. "How AI shapes greener futures: Comparative insights from equity vs debt investment responses in renewable energy," Energy Economics, Elsevier, vol. 136(C).
    7. Abdulaziz A. Alotaibi & Naif Alajlan, 2021. "Using Quantile Regression to Analyze the Relationship between Socioeconomic Indicators and Carbon Dioxide Emissions in G20 Countries," Sustainability, MDPI, vol. 13(13), pages 1-12, June.
    8. Quan Cheng & Jing Yang, 2023. "Allocation and Evolution of Government Attention in China’s Electric Power Industry: An Analysis Based on Policy Text," Sustainability, MDPI, vol. 15(16), pages 1-19, August.
    9. George Ekonomou & George Halkos, 2023. "Exploring the Impact of Economic Growth on the Environment: An Overview of Trends and Developments," Energies, MDPI, vol. 16(11), pages 1-19, June.
    10. Bartosz Jóźwik & Phouphet Kyophilavong & Aruna Kumar Dash & Antonina Viktoria Gavryshkiv, 2022. "Revisiting the Environmental Kuznets Curve Hypothesis in South Asian Countries: The Role of Energy Consumption and Trade Openness," Energies, MDPI, vol. 15(22), pages 1-20, November.
    11. Mac Clay, Pablo & Börner, Jan & Sellare, Jorge, 2023. "Institutional and macroeconomic stability mediate the effect of auctions on renewable energy capacity," Energy Policy, Elsevier, vol. 180(C).
    12. Radoslaw Miskiewicz, 2022. "Clean and Affordable Energy within Sustainable Development Goals: The Role of Governance Digitalization," Energies, MDPI, vol. 15(24), pages 1-17, December.
    13. Ran, Qiying & Yang, Xiaodong & Yan, Hongchuan & Xu, Yang & Cao, Jianhong, 2023. "Natural resource consumption and industrial green transformation: Does the digital economy matter?," Resources Policy, Elsevier, vol. 81(C).
    14. Ray, Manojit & Chakraborty, Basab, 2022. "Impact of demand flexibility and tiered resilience on solar photovoltaic adoption in humanitarian settlements," Renewable Energy, Elsevier, vol. 193(C), pages 895-912.
    15. Dong, Kangyin & Sun, Renjin & Li, Hui & Liao, Hua, 2018. "Does natural gas consumption mitigate CO2 emissions: Testing the environmental Kuznets curve hypothesis for 14 Asia-Pacific countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 94(C), pages 419-429.
    16. Kandpal, Bakul & Backe, Stian & Crespo del Granado, Pedro, 2024. "Enhancing bargaining power for energy communities in renewable power purchase agreements using Gaussian learning and fixed price bargaining," Energy, Elsevier, vol. 309(C).
    17. Kangyin Dong & Yalin Han & Yue Dou & Muhammad Shahbaz, 2022. "Moving toward carbon neutrality: Assessing natural gas import security and its impact on CO2 emissions," Sustainable Development, John Wiley & Sons, Ltd., vol. 30(4), pages 751-770, August.
    18. Xingwei Li & Jingru Li & Yicheng Huang & Jinrong He & Xiang Liu & Jiachi Dai & Qiong Shen, 2022. "Construction enterprises’ adoption of green development behaviors: an agent-based modeling approach," Palgrave Communications, Palgrave Macmillan, vol. 9(1), pages 1-11, December.
    19. Gurbanov, Sarvar, 2021. "Role of Natural Gas Consumption in the Reduction of CO₂ Emissions: Case of Azerbaijan," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 14(22).
    20. Huang, Zhilin & Li, Xiang & Chen, Jialing & Zhang, Dingfeng, 2024. "Does the Three-Year Action Plan for Winning the Blue Sky Defense Battle implementation enabling the high-quality development of regional energy? A quasi-natural experiment from China," Energy, Elsevier, vol. 312(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:17:y:2025:i:7:p:3010-:d:1622590. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.