Renewable Energy and CO2 Emissions: Evidence from Rapidly Urbanizing Countries

This study explores the relationship between renewable energy consumption and carbon dioxide emissions focusing on most rapidly urbanizing countries which has been overlooked in the empirical research. This study also investigates the presence of the Environmental Kuznets curve relationship between income and carbon emissions. Using two-step system GMM estimator for the years 2000-2015, we find that renewable energy reduces carbon dioxide emissions. Moreover, we document that quality of institutions mediates the relationship between renewables and environmental degradation. The important policy implications are discussed.

Automated summary

This study examines the relationship between renewable energy consumption and carbon dioxide emissions in rapidly urbanizing countries, which has been largely overlooked in previous research. The study finds that renewable energy can help reduce carbon dioxide emissions and that the quality of institutions plays a mediating role in the relationship between renewables and environmental degradation. The findings have important policy implications.