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Green energy, non-renewable energy, financial development and economic growth with carbon footprint: heterogeneous panel evidence from cross-country

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  • Najia Saqib

Abstract

This study examines the relationship between green energy, non-renewable energy, financial development, and economic growth with carbon footprint by using panel data from 63 emerging and developed economies for the time period from 1990 to 2020. The study utilises second-generation panel data econometrics techniques to investigate cross-section independence and adjust for cross-section heterogeneity. The studies also used the CIPS and CADF unit root tests, Wester Lund bootstrap cointegration techniques, and AMG and CCEMG heterogeneous panel causality techniques. The findings show that, over the long run, all variables are cointegrated. Additionally, the data indicate that non-renewable energy consumption leads to carbon footprint, whereas green energy reduces environmental degradation and supports the reduction of environmental hazards. Likewise, financial development has a considerable negative effect on environmental degradation. A statistically significant bidirectional correlation is found between green energy, nonrenewable energy, financial development, economic growth, and carbon footprint according to the Dumitrescu-Hurlin causality test. Finally, according to the findings of the study, the economies that were examined should use more green energy in order to reduce their carbon footprint.

Suggested Citation

  • Najia Saqib, 2022. "Green energy, non-renewable energy, financial development and economic growth with carbon footprint: heterogeneous panel evidence from cross-country," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 35(1), pages 6945-6964, December.
    • Handle: RePEc:taf:reroxx:v:35:y:2022:i:1:p:6945-6964
    DOI: 10.1080/1331677X.2022.2054454
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    Cited by:

    1. Louis David Junior Annor & Margarita Robaina & Elisabete Vieira, 2024. "Climbing the green ladder in Sub-Saharan Africa: dynamics of financial development, green energy, and load capacity factor," Environment Systems and Decisions, Springer, vol. 44(3), pages 607-623, September.
    2. Xinxin Wang & Zeshui Xu & Yong Qin & Marinko Skare, 2023. "The global impact of financial development on renewable energy in a panel structural vector autoregression analysis," Sustainable Development, John Wiley & Sons, Ltd., vol. 31(3), pages 1364-1383, June.
    3. Qin, Yong & Xu, Zeshui & Luo, Chaoguang & Skare, Marinko, 2024. "Investigating the nexus among resource curse, energy transition and sustainable development: Evidence from a global panel data," Resources Policy, Elsevier, vol. 88(C).
    4. Balsalobre-Lorente, Daniel & Contente dos Santos Parente, Clara & Leitão, Nuno Carlos & Cantos-Cantos, José María, 2023. "The influence of economic complexity processes and renewable energy on CO2 emissions of BRICS. What about industry 4.0?," Resources Policy, Elsevier, vol. 82(C).
    5. Narayan, Seema & Narayan, Paresh Kumar, 2024. "Clean energy for the Pacific Island countries: Does donor funding promote this transition?," Energy Economics, Elsevier, vol. 134(C).
    6. Jin, Yinshi & Zhou, Bingjun & Zhang, Panpan & Li, Tiancai, 2024. "How education expenditures, natural resources, and GDP interact with load capacity factor in the presence of trade diversity index under COVID-19 perception: Evidence from G-7 nations," Resources Policy, Elsevier, vol. 88(C).
    7. Izabela Jonek-Kowalska, 2023. "Motives for the Use of Photovoltaic Installations in Poland against the Background of the Share of Solar Energy in the Structure of Energy Resources in the Developing Economies of Central and Eastern ," Resources, MDPI, vol. 12(8), pages 1-25, July.
    8. Ahakwa, Isaac & Xu, Yi & Tackie, Evelyn Agba & Odai, Leslie Afotey & Sarpong, Francis Atta & Korankye, Benard & Ofori, Elvis Kwame, 2023. "Do natural resources and green technological innovation matter in addressing environmental degradation? Evidence from panel models robust to cross-sectional dependence and slope heterogeneity," Resources Policy, Elsevier, vol. 85(PB).
    9. Shi, Lumin & Udemba, Edmund Ntom & Emir, Firat & Khan, Nazakat Ullah & Hussain, Sadam & Boukhris, Imed, 2023. "Mediating role of finance amidst resource and energy policies in carbon control: A sustainable development study of Saudi Arabia," Resources Policy, Elsevier, vol. 82(C).
    10. Cao, Jianhong & Law, Siong Hook & Samad, Abdul Rahim Abdul & Mohamad, Wan Norhidayah W., 2023. "Internal mechanism analysis of the financial vanishing effect on green growth: Evidence from China," Energy Economics, Elsevier, vol. 120(C).
    11. Qin, Yong & Xu, Zeshui & Wang, Xinxin & Škare, Marinko, 2023. "The effects of financial institutions on the green energy transition: A cross-sectional panel study," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 524-542.
    12. He, Xu & Sun, Shiquan & Leong, Lin Woon & Cong, Phan The & Abu-Rumman, Ayman & Halteh, Khaled, 2023. "Does clean energy and technological innovation matter for economic growth? An Asian countries perspective," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 1195-1208.
    13. Bhat, Aijaz Ahmad & Mir, Ajaz Akber & Allie, Adeel Hussain & Ahmad Lone, Mushtaq & Al-Adwan, Ahmad Samed & Jamali, Dima & Riyaz, Iqra, 2024. "Unlocking corporate social responsibility and environmental performance: Mediating role of green strategy, innovation, and leadership," Innovation and Green Development, Elsevier, vol. 3(2).

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