How economic growth, renewable electricity and natural resources contribute to CO2 emissions?. (February 2018)

• Record Type: Journal Article
• Authors: Balsalobre-Lorente, Daniel; Shahbaz, Muhammad; Roubaud, David; Farhani, Sahbi
• Is Part Of: Energy policy. Volume 113(2018)
• Page Start: 356
• Page End: 367
• Publication Date: 2018-02
• Subjects: Economic growth -- Renewable electricity -- Natural resources -- Environment; Energy policy -- Periodicals; Politique énergétique -- Périodiques; Electronic journals; 333.79
• DOI: 10.1016/j.enpol.2017.10.050
• Languages: English
• ISSNs: 0301-4215

Abstract

Abstract: This study explores the relationship between economic growth and CO2 emissions in the so-called European Union 5 (EU-5) countries (Germany, France, Italy, Spain, and the United Kingdom) for the 1985–2016 period. In doing so, we employ a carbon emission function to investigate the environmental Kuznets curve phenomenon, which describes a relationship between economic growth and environmental degradation. The empirical results confirm the existence of an N-shaped relationship between economic growth and CO2 emissions in the EU-5 countries. We incorporate additional variables such as renewable electricity consumption, trade openness, natural resource abundance, and energy innovation to augment the carbon emission function. Renewable electricity consumption, natural resources, and energy innovation improve environmental quality, while trade openness and the interaction between economic growth and renewable electricity consumption exert a positive impact on CO2 emissions. This study is novel in that it presents an interaction between economic growth and renewable electricity consumption. We also confirm the need for renewable energy regulations related to increasing renewable sources and promoting energy innovation to reduce the negative effects of energy and fossil energy resources on environmental degradation. Highlights: The N-shaped EKC relationship exists between economic growth and CO2 emissions. Renewable electricity consumption exerts negative effect on carbon emissions. Natural resource availability improves environmental quality. Economic growth/renewable electricity consumption relation increases CO2 emissions.