Solar Energy and CO2 Emissions: CCEMG Estimations for 26 Countries

This study examines the long-term relationships between solar energy, globalization, coal energy consumption, economic growth, and CO2 emissions. We included data from 26 countries for which data are available for 2000-2019. To consider the cross-sectional dependence and slope homogeneity, which are prominent in the panel data analysis, we preferred the mean group of co-related effects (CCEMG) method. According to OLS, FMOLS, and CCEMG estimations, solar energy consumption negatively affects CO2 emissions. A 1 % increase in solar energy consumption causes a 0.0106671% reduction in CO2 emissions. There is bidirectional causality between solar energy consumption and CO2 emissions in the long run. Globalization does not have a significant effect on CO2 emissions. However, coal energy consumption and economic growth appear to cause an increase in CO2 emissions. Because of the diversity and consistency of the methods we used to measure the relationships between variables in our article, the dominant power of solar energy in reducing carbon emissions has been proven once again. Encouraging the use of solar energy by countries and supporting investments in this field has emerged as benefiting from solar energy based only on the geographical advantage they have, regardless of globalization. For this reason, it is essential for environmental sustainability that governments give tax advantages and energy investment incentives to companies that prefer solar energy in their production processes. As a result, reduced carbon emissions will also bring about a greener environment.