How does renewable energy contribute to the growth versus environment debate?. (December 2022)

• Record Type: Journal Article
• Authors: Boubaker, Sabri; Omri, Anis
• Is Part Of: Resources policy. Volume 79(2022)
• Publication Date: 2022-12
• Subjects: Sustainable development goals -- COP26 -- CO2 emissions -- Renewable energy -- Economic growth; Mines and mineral resources -- Periodicals; Ressources minérales -- Périodiques; Ressources naturelles -- Gestion -- Périodiques; Environnement -- Politique gouvernementale -- Périodiques; 333.8
• DOI: 10.1016/j.resourpol.2022.103045
• Languages: English
• ISSNs: 0301-4207

Abstract

Abstract: The relation between carbon emissions and economic growth is one of the most debated topics in the literature. Curbing global emissions while fostering economic growth is at the heart of the Sustainable Development Goals (SDGs), the 26th United Nations Climate Change Conference (COP26), and the resulting "Glasgow Climate Pact." Using data from 22 emerging economies covering 1990–2018, we examine the role of renewable energy in balancing CO2 emissions reductions and economic growth. Since economic growth and emissions are mutually determined, we use a simultaneous-equation modeling approach based on the GMM method to deal with unobserved heterogeneity. The empirical results show that (i) economic growth increases per capita emissions while per capita emissions decrease economic growth, confirming the conflict between economic growth and carbon emissions reduction; (ii) renewable energy reduces emissions and increases economic growth; (iii) renewable energy moderates the positive impact of economic growth on emissions; and (iv) renewable energy moderates the negative effect of emissions on economic growth. Overall, renewable energy could be a solution to reach the dual objectives of continuing economic growth and reducing CO2 emissions in emerging economies. These results call for policymakers to take urgent measures and appropriate policies toward a low-carbon energy environment to achieve these dual objectives. Highlights: Examines the role of renewable energy in balancing CO2 emissions reductions and economic growth. Uses a simultaneous-equation modeling approach based on the GMM method. Economic growth increases per capita emissions that in turn emissions decrease economic growth. Results confirm the conflict between economic growth and carbon emissions reduction. Renewable energy could be a solution to reach the dual objectives of economic growth and low CO2 emissions.