The effect of renewable energy and urbanization on CO2 emissions: A panel data

Europe has experienced fast-paced urbanization development over the past three decades. This paper empirically investigates the long-run equilibrium relationships and causal relationships among urbanization, renewable energy consumption, and CO2 emissions, and this is important for EU countries' future sustainable development. DOLS and FMOLS approaches are used for the period 1992-2014. Granger causality results show that there is a unidirectional relationship from CO2 emissions to urbanization, and there is no causality between renewable energy consumption and CO2 emissions. The results have important implications for EU policymakers on the path toward a sustainable society. Urbanization can have negative impacts on the natural environment with the net effect being hard in EU countries.