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Energy transition investments and carbon emissions: asymmetric and dynamic effects across developed and emerging economies

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  • Boulanouar, Zakaria
  • Essid, Lobna
  • Ullah, Sami

Abstract

Achieving net-zero emissions is a central global challenge. While Energy Transition Investments (ETIs) are rising, their environmental effectiveness remains uncertain. This study examines the asymmetric impact of ETIs on carbon emissions across 32 major economies (2004–2023) using a Panel Nonlinear ARDL model. Results reveal that positive ETI shocks significantly reduce emissions, while negative shocks increase them less strongly. The Environmental Kuznets Curve is validated and extended to account for green investment flows. Tapio decoupling analysis further shows divergent transition paths between developed and emerging economies. Findings highlight the need for stable, long-term climate finance to sustain global decarbonization.

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  • Boulanouar, Zakaria & Essid, Lobna & Ullah, Sami, 2025. "Energy transition investments and carbon emissions: asymmetric and dynamic effects across developed and emerging economies," Finance Research Letters, Elsevier, vol. 83(C).
    • Handle: RePEc:eee:finlet:v:83:y:2025:i:c:s1544612325010049
    DOI: 10.1016/j.frl.2025.107746
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