IDEAS home Printed from https://ideas.repec.org/a/eee/juipol/v95y2025ics0957178725000499.html
   My bibliography  Save this article

Electricity prices, renewable energy, and sustainability of the energy and manufacturing sectors in the new EU member states

Author

Listed:
  • Simionescu, Mihaela
  • Radulescu, Magdalena

Abstract

This paper investigates the impact of renewable energy consumption, foreign direct investment (FDI), and electricity pricing on carbon dioxide (CO2) emissions in the energy supply and manufacturing sectors of Central and Eastern European (CEE) countries in the period 2007–2021. This study uses dynamic panel data models to examine the Environmental Kuznets Curve (EKC) and the pollution haven and halo hypotheses to understand the sector-specific emission patterns and identify the factors that influence environmental sustainability. Most other studies do not consider a sectoral approach providing the same proposals for all sectors, while this paper provides original, sector-targeted policy recommendations to balance economic growth with EU climate goals, emphasizing renewable energy incentives and stringent FDI standards. The results reveal an N-shaped relationship between economic growth and CO2 emissions in the energy sector and an inverted N-shaped relationship in the manufacturing sector, indicating distinct emission trajectories that warrant targeted policy responses. The empirical findings demonstrate that renewable energy consumption significantly reduces emissions in both sectors, substantially impacting the energy sector. Additionally, the U-shaped relationship between FDI and CO2 emissions suggests that while FDI initially brings cleaner technologies (halo effect), it may later contribute to higher emissions under insufficient environmental regulations (haven effect). Higher electricity prices for non-household consumers are also found to effectively lower emissions, particularly in the energy sector, by encouraging energy-efficient practices.

Suggested Citation

  • Simionescu, Mihaela & Radulescu, Magdalena, 2025. "Electricity prices, renewable energy, and sustainability of the energy and manufacturing sectors in the new EU member states," Utilities Policy, Elsevier, vol. 95(C).
  • Handle: RePEc:eee:juipol:v:95:y:2025:i:c:s0957178725000499
    DOI: 10.1016/j.jup.2025.101934
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0957178725000499
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.jup.2025.101934?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:juipol:v:95:y:2025:i:c:s0957178725000499. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.sciencedirect.com/journal/utilities-policy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.