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The relationship between manufacturing growth and CO2 emissions: Does renewable energy consumption matter?

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  • Yang, Mian
  • Wang, En-Ze
  • Hou, Yaru

Abstract

Taking renewable energy consumption as a concomitant variable and using data from 25 manufacturing subsectors in 38 countries from 2000 to 2014, this paper investigates the impact of economic growth on CO2 emissions at the subsector level by employing an endogenous finite mixture model for the first time. The results are as follows: (1) Manufacturing growth has led to a significant increase of CO2 emissions, but this promoting effect becomes weak as the share of renewable energy consumption expands; (2) With the growing impact of renewable energy consumption, nearly half of the sample countries and two-thirds of the subsectors have experienced the transformation of the nexus between manufacturing growth and emissions; and (3) Compared with coal, coke and crude, the growth of the manufacturing subsector that is mainly dependent on natural gas, electricity and heat, has produced lower emissions. Our findings provide significant evidence of and references for formulating renewable energy policy for various manufacturing subsectors.

Suggested Citation

  • Yang, Mian & Wang, En-Ze & Hou, Yaru, 2021. "The relationship between manufacturing growth and CO2 emissions: Does renewable energy consumption matter?," Energy, Elsevier, vol. 232(C).
    • Handle: RePEc:eee:energy:v:232:y:2021:i:c:s0360544221012809
    DOI: 10.1016/j.energy.2021.121032
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    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources

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